From time to time on twitter — and yesterday in context of that Windows XP ransomware / NHS thing — I get in an argument about how crypto-currencies will revolutionise the whole world of finance — and maybe they will.But in my experience proponents’ arguments stop at the level of How can they possibly stop an internationally distributed currency run by no-one in particular?The answer is, easily, at least once it starts getting traction so that it would matter on an international scale.Firstly as a starter: I have been told that Bitcoin is already important, after all it has $30bn of market cap.First point to note, US$ M1 is $3tn, give or take.So even on a pretty narrow measure, BTC is 1% of US$ — and BTC is (a) international, and (b) probably a not insignificant supply of the coins is inaccessible by now.Now this is of course a stock and we are interested in flows, and whilst I don’t have the numbers I am pretty certain that the ratio of flows is even more lopsided — especially once you take out some spurious stuff like mixers (and Satoshi dice?

are Satoshi dice still a thing?).This is to say: the reason that there are no controls in place is not because it is impossible to control, but mostly because it thus far is not significant enough to matter.So how will states control Bitcoin and other crypto currencies if need be?The answer is of course like any other assets that can serve as a means of exchange, using the anti-money laundering and anti-terrorist finance regulation that is in place globally, and in what follows I’ll discuss how that works.Globally there is a thing called the Financial Action Task Force (FATF) and they run a shiny website, explaining who they are: an organisation of 35 large countries that coordinate on money laundering matters and that ensure that equivalent legislation is in place in all of them.In the EU, this legislation is mostly contained in the Anti Money Laundering Directive (AMLD 4) 2015/849.So without further ado, let’s dive into those regulations.Firstly: To whom do those regulations apply?

The short answer is: essentially everyone active in financial services, plus everyone outside financial services (!)handling cash amounts of over €10,000 (aggregated over multiple related transactions) for the purchase of goods.So if your business is selling gold, or real estate, or art — as soon as your item is of moderately substantial value, you are covered.pwc and bitcoinAs an aside: technically the regulation only mentions goods so I guess if you flip bitcoins for €10,000+ in cash you are currently technically fine, but this is not really relevant for what follows.The key article here is Article 11 (my highlights):What customer due diligence measures are is detailed in Article 13.1:Customer due diligence measures shall comprise:So essentially, whenever someone comes to you with a large pile of cash to buy stuff — or comes repeatedly with not quite that large piles of cash — you have to go through some pretty long process to ascertain that this money has been received lawfully.Now interestingly this directive does not define cash, so I guess technically those provision would not apply if you’d pay in gold (there is a small provision regarding bearer securities in Article 10), even though it would be difficult to argue that paragraph (e) — suspicion of money laundering — would not apply in this case.Anyway, those paragraphs — suitably amended — are all you need to ensure that crypto currencies can not be used to shelter proceeds of crime:For good measure one might also want to ensure that exchanging cash into crypto and vice versa is covered, but this is not quite essential, as it is the equivalent of changing say USD into EUR — both are without the boundaries of the controlled financial system.Now you might say “That’s all nice and well, but what if I establish my crypto exchange in a country that has not signed up to those AML regulations?”.bitcoin buy quora

First point to make here is good luck to you if your intention is to launder a significant amount of money through a dodgy jurisdiction if you lack the extra-judicial clout of enforcing claims if something goes wrong in a system with a weak judiciary.More importantly, there is the concept of a high-risk country in the legislation (Art 9.1):Once a country is in the dog-house, any financial institutions dealing with funds coming from there must apply what is called enhanced customer due diligence (Art 18):So what are the implications of this for crypto currencies?bitcoin pwcTo name but a few:bitcoin atm volumeIn a released statement, the CIB said police authorities arrested eight suspects of the ring at a house in northern Taoyuan City on April 28.ethereum coindeskCIB said the house was where the ring set up its money laundering center.bitcoin thief caught

The case is now being probed by the New Taipei District Prosecutors Office with four of the eight suspects currently under detention, it noted.According to the CIB, the ring allegedly helped telecommunication fraud rings by laundering their money.Using a complex process and by taking advantage of an China-based online trade platform of Bitcoin currency, a digital asset and payment system, the ring helped other phone fraud rings to secure the money they scammed from victims so that they would not be found by police authorities.Since its establishment this April, the ring had managed to launder several million renminbi, storing it in secure accounts, CIB added.The CIB said it will continue to work with Chinese police authorities in investigating whether there are more suspects involved in related activities.PREVIOUS ARTICLEMediaTek April sales hit new high as clients begin building inventoryNEXT ARTICLERevised Animal Protection Act expands penalties on illegal pet farmsA Florida court declared bitcoin is a fake currency in a case against a man charged with illegally selling and laundering $1,500 worth of bitcoin.

The Miami-Dade judge Teresa Mary Pooler cleared the charges against Michell Espinoza, who was illegally selling bitcoins to undercover detectives.The issue arises because detectives working the case told Espinoza that they planned to use the bitcoin that they were buying from him to purchase stolen credit cards.According to Florida’s definition of the law, this is considered money laundering.At least, that is the way that the law is written.In this state, one can be charged with the crime if they knowingly participate in a financial transaction that will “promote” illegal activity.The problem is that Judge Pooler doesn’t think bitcoin counts as a “financial transaction.” Judge Pooler, however, ruled that the current statute was too vague to apply to cryptocurrency and that even legal experts “have difficulty finding a singular meaning.” “The court is not an expert in economics, however, it is very clear, even to someone with limited knowledge in the area, the Bitcoin has a long way to go before it the equivalent of money,” the judge says.