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reconnecting 15 hours ago [-]
The true crime is involving a multinational corporation in a transaction between two private individuals at the local market.
I like cash because it's direct, and where possible I avoid paying by card because I don't want the merchant to pay fees to third parties.
In Europe, most of the time, using cash doesn't imply avoiding taxes on the transaction, but having cash is essentially sovereignty.
marysol5 14 hours ago [-]
FYI, handling cash has fees to "third parties" too.
In a lot of cases it's a lot higher than just taking card.
humoctopus 11 hours ago [-]
My business needs to insure cash that we keep at the shop in case we get robbed, but that amount is much much less than we pay in credit card fees. In other words, we would much prefer customers to pay with debit or cash.
SkiFire13 5 hours ago [-]
Is this comparison made with the cost of transactions in the US or elsewhere? For example in Europe interchange fees are generally much lower, especially for debit cards which are also more common than credit cards.
buran77 6 hours ago [-]
What about the extra costs of handling cash, the practical effort to count it, prepare it for transport (including bags, counters, and so on), transporting to the bank, increased security, possibly more cash registers, counterfeit detectors etc.? Overall is it usually more expensive to take credit cards than cash or just in particular cases?
anticorporate 6 hours ago [-]
Retailer here: Most of these costs are fairly fixed. We have to have a safe, bags, armored transport, staff training on counterfeit detection, etc. whether the percentage of our sales in cash is 8% or 80%. The few costs that are variable are still far, far less than the processing fees.
It's also worth noting there are also huge fixed costs for credit card transactions. We're currently upgrading our pinpads and it's been an absolute nightmare to get the right parts in just for physically connecting the damn things to our counters, we lost almost a whole day of backend POS access for our vendor to push a required update, and I'm looking at more fees to be able to support other types of cards which require POS certification.
We strongly prefer our customers use cash.
antonymoose 4 hours ago [-]
Buddy of mine runs a cash only bar and grill.
The costs to handle cash are fairly low. He bought one of those fancy cash counters like they have at the bank for a few hundred. He also bought one of those cheap little ATMs for perhaps $500 and charges $1 to take out cash. He keeps $2,000 on hand at all times between the safe and the ATM itself. Otherwise, he just stops by the bank two blocks down the street to deposit profits. As for security, well, they just carry concealed weapons.
The ATM paid for itself in the first month, presumably also the cash counter machine. Notably they did have one counterfeit $100 come through that they forgot to scan. I suppose that’s novel to cash although chargebacks on cards also do occur.
UltraSane 6 hours ago [-]
I use a credit card that I pay off in full every month and I get 2% cash back paid for by interest other users pay.
SkiFire13 5 hours ago [-]
Most of your cash back money actually comes from fees that merchants pay. In the US and especially for credit cards with cash back those fees can be quite high, and unfortunately it's illegal for merchants to discriminate against credit cards with high fees.
mercutio2 17 minutes ago [-]
This used to be true. But the 2025 Interchange Fee Settlement abolished the “Honor All Cards” regime. Perhaps, I know it’s crazy, but… perhaps segmenting the market into extremely high-spending customers, normal pay-every-month-relatively-low-fees, and no-frills, was a smart move by the big issuers? My sense is that alienating big spenders (whose interchange fees tend to be in the 4% range) is just not worth it?
All I can say for sure is no store I’ve ever encountered has operationalized the newfound ability to differentially reject some cards yet. I am starting to see grittier establishments offer 5% cash discounts more frequently than they used to, and I’m always happy to pay cash when they do.
But when there’s no discount, why would I forgo better accounting and 3-5% back in points?
bhelkey 3 hours ago [-]
> it's illegal for merchants to discriminate against credit cards with high fees
Do you have a source for this? Often times merchants don't accept American Express because it charges higher fees [1].
Don't you pay 3% of every purchase to your credit card?
elteto 5 hours ago [-]
Most of the time it’s the other way around, at least in the US: because cash and credit card prices are almost always the same it is the cash users who are overpaying, to the tune of 2-3% of the purchase price. It makes no sense to use cash.
satvikpendem 5 hours ago [-]
No, the merchant pays, although recently more and more have been handing off the 3% to the consumer by giving a lower cash price. But well, most people don't have cash so that's essentially a convenience fee.
AnthonyMouse 5 hours ago [-]
The credit card companies tell you that the merchant pays. Cost incidence doesn't work like that. If every seller in a fungible commodity market has the same additional cost, the price is going up by that amount.
mercutio2 14 minutes ago [-]
Yes, but you’re perhaps missing OP’s point?
Incidence is very much on customers, but (high interchange fee) credit card users are getting a rebate of most, if not all, of that. It’s the cash users who AREN’T getting a rebate, and thus the incidence is on them (and people using other low-or-zero cashback payment methods).
4 hours ago [-]
tunesmith 5 hours ago [-]
as opposed to what, though? You don't get a 3% discount for using cash.
AnthonyMouse 5 hours ago [-]
In many cases they do actually offer the discount (or tack on the "hidden" fee for using a credit card). In some markets there are also sellers who only accept cash (often discount stores etc.) and correspondingly have lower prices, which is a slightly more inconvenient version of the same thing if you patronize them.
Moreover, we should encourage every retailer to offer this, because getting 2% back (or less) while paying 3% more is not just a net loss, it's also worse for privacy.
satvikpendem 5 hours ago [-]
Depends on your points usage, airline points can be much more valuable than the 3% fee.
AnthonyMouse 5 hours ago [-]
Airlines also sell "points" for cash and you can get them for essentially the same cost as the credit card companies do. They're just using the 2% cash back to buy them for you, so even if you want flights, getting a 3%+ discount and using the money to buy points puts you ahead. It also lets you time your purchase (there are sometimes temporary "deals" on points), collect interest on the cash until you exchange it for something, and not lock yourself in to getting only airline miles instead of any of the other things you can buy with money until you decide that instead of having it imposed you at the point you use that card.
satvikpendem 5 hours ago [-]
In some areas you do actually, lots of local restaurants for example.
IncreasePosts 5 hours ago [-]
No? There's zero % interest for every purchase if you pay for it fully the next billing cycle
bradley13 16 hours ago [-]
First off, money laundering does not require cash. So the premise is a bit strange.
Second, I submit that money laundering should not be considered a crime at all. Monitoring it (for example, banks required to report large cash transactions to the government) just leads to mass surveillance of innocent people.
Transferring money from A to B - why should that be a crime? The point of anti-money-laundering laws is that the money generated at point A may have been generated illegally. It isn't the money transfer that is the problem, it is the illegal activity. The police need to put in the effort to prosecute that illegal activity.
This is reminiscent of the continual pressure to break end-to-end encryption. The police want an easy way to do their (admittedly difficult) job. But the price is just too high: mass surveillance, and many false positives, affecting the general populace.
matheusmoreira 6 hours ago [-]
Completely agree with you. AML/KYC laws are just the financial arm of global mass surveillance. They should be opposed and resisted on principle. It doesn't matter if it makes the police's job more difficult.
drmathias 16 hours ago [-]
AML laws enforce monitoring so that legitimate businesses have to block or report activity, assisting law enforcement in tracing said criminal activity. It's the most effective way. As the famous saying goes: follow the money.
You're correct on the privacy implications. It's shocking how much data AML monitoring companies have collected about you, there's more data points than any single person could think up. These aren't entities owned by the government - they're private companies.
Also yes money laundering does not require cash but I think the author is highlighting the scale of it. Most countries tax consumption a.k.a VAT and 'hidden transactions' such as cash transactions bypass that.
You can be anti-anti-money-laundering but then you also either have to be a complete anarchist or completely anti-taxation and anti-data-collection by corporations and yet still have a reasonable argument for how this will result in the ability for society to have a government.
I'm not saying the system is perfect - far from any means. However the utopia you describe seems infeasible to me.
AnthonyMouse 4 hours ago [-]
> It's the most effective way.
Its effectiveness is shockingly poor and rounds to zero:
> I haven’t even mentioned gold, which is used all the time in criminal transactions, let alone cryptocurrency, the single biggest recent innovation in money laundering.
Curious how that line is received within the HN crowd.
AnthonyMouse 4 hours ago [-]
It seems pretty obvious that cryptocurrency can be used to transfer funds. The question is whether this is actually an innovation or just method #373453 of doing the thing that was always possible a million other ways.
Suppose someone has a million dollars in cash and wants to turn it into "clean" money in a bank account, or transfer it to another country. They pick any goods with a high cost to weight ratio and a third party sale value close to its store price, list them on any marketplace for a competitive price in the country they want the money to end up. When someone orders it from them, they use the dirty money to buy one at any retailer, ship it to buyer, get paid in clean money. When operating at scale they could even get the wholesale price for the goods and be turning a small additional profit from the operation.
What does cryptocurrency add to this? Maybe slightly lower overhead or setup time? If it didn't exist, would they actually be prevented from laundering the money?
air7 45 minutes ago [-]
I don't get it.
The IRS sees a clean million dollars in your bank account. They ask "how did you get that?" You answer "Oh I just sold this super expensive thing on a marketplace". Then they ask "Ok, but how did you get/buy this expensive thing?"
What do you say?
Anonyneko 4 hours ago [-]
Considering my country of origin is using crypto for sanction busting at an enormous scale, I just take this line as absolute truth.
Matl 4 hours ago [-]
Sanction busting is an interesting thing because states are sovereign so if one state imposes sanctions on another, it's not illegal for the sanctioned state to do everything to ignore/bypass them, unless we consider the sanctioning state to be somehow above others/source of truth for what's legal.
5 hours ago [-]
4 hours ago [-]
applicative 2 hours ago [-]
The writer argues that since $100 bills aren't much used in daily commerce, the 80% of circulating paper money in $100s must be used for crime. But it is obviously predominantly hoards. I know US $ are hoarded all across Latin America, and assume it is so elsewhere. Even in USA keeping them somewhere secure is a sort of hedge against banking collapse, if not against 'collapse of the dollar'. It is like gold or anything else.
No apriori principle can tell you what the ratio of 'genuinely circulating' to hoarded money should be. When money was gold or silver, as Bagehot says, the hoards in e.g. France were huge, but those in Scotland, where there was enthusiasm for the banks, were tiny.
mike_hearn 15 hours ago [-]
I learned a lot about the AML system many years ago and still have some books about how it works on my bookshelf. It's fascinating stuff.
A few minor comments.
My wife and I have owned and used 1000 CHF notes quite a few times in the past. The last two times we moved apartments I paid part of the moving fee with a 1000 CHF note. We've also bought furniture this way. Nobody was surprised to see this and the notes were accepted without question or comment. To a person who spent their life in Britain this sounds absurd because the British government has - true to form - been trying to wipe cash out for many years to improve surveillance. You can't get any high value notes there, they just don't exist, because the state assumes that anything it can't see must automatically be suspicious. And there's so much street crime, and the police care so little about burglary, it would be very dangerous to hold such notes. But in Switzerland it's safe and the government doesn't try to wipe cash out, so paying with high value notes is common. (Although bank notes are in no way as private as people assume and can be tracked quite well, because they don't tend to circulate far.) This situation makes a mockery of the recommendation to fight crime by removing high value bank notes. The UK did this already and ML is out of control there: criminals just don't care.
I looked into the case of George Cottrell once. The case against Cottrell collapsed because it was founded on entrapment (the eight months was a plea deal in the usual American fashion, and doesn't mean much). It boiled down to undercover FBI agents asking Cottrell, "how could we launder money" and he explained how to do it, in the way anyone familiar with the topic could. He didn't make any offers to actually do it, didn't do it, and that's why "could be jailed for up to 20 years" turned into an eight month plea bargain to let prosecutors save face. Then after he was released he trolled US LE by writing a book called "How to launder money". Usually not given is the subtitle: "A guide for law enforcement and politicians". It's not written for criminals but people love to omit that detail.
Carousel fraud in the EU is a huge problem that governments hate to talk about because they don't know how to fix it and fear that by talking about it, they'll just teach more people how to do it. It's an infinite money glitch but in the real world. It's interesting that the UK thinks they solved it. I suspect they didn't, rather, enforcement collapsed elsewhere and it became easier to just go back to other ways of scamming the government.
pjc50 14 hours ago [-]
> You can't get any high value notes there, they just don't exist
Yes, although this is mostly by capping the highest regularly circulating note at £50 after the war and then waiting for inflation.
> And there's so much street crime,
[mostly false]
> and the police care so little about burglary,
Sadly true (including "find my iPhone" reports; there was a joke during the Mandelson scandal that this was the one time the Met had managed to locate a phone)
> The UK did this already and ML is out of control there: criminals just don't care.
Yes, which makes a sort of orthogonal point about whether or not cash is actually important for this. There's the conspicuously suspicious businesses ("American sweet shops"), but also more complicated stuff going on (Scottish Limited Partnerships were in the news). Then there's all the Crown dependencies, which are a total financial wild west still.
> Carousel fraud in the EU is a huge problem that governments hate to talk about because they don't know how to fix it
God yes. This is a significant problem in VAT as a concept; I don't understand why the EU loves VAT so much.
userulluipeste 11 minutes ago [-]
"I don't understand why the EU loves VAT so much."
Because it's easy money as taxation goes. Facing growing fiscal deficit and worsening credit score, the first thing the government in Romania did last summer was to rise the (general) VAT quota and cut on some VAT exceptions. It works quicker and more reliably than other means for securing the budget needs.
The VAT related fraudulent schemes are a problem in EU as many other things are, but they are investigated, often prosecuted, and written about. For anyone interested, more can be found at the European Public Prosecutor's Office's site: https://www.eppo.europa.eu/en/media/news
gambiting 13 hours ago [-]
>>Sadly true (including "find my iPhone" reports
I'll give you one better. I know someone who had their nearly new Range Rover stolen in Manchester - reported to the police etc. Few days later, they found it parked at a car park near a big supermarket. Rang the police, they said well, if you still have the keys...just take it? And he was like hang on, you don't want to look at it, check for drugs, take fingerprints, you know, do any actual police stuff stuff around stolen property? And they were like nope, don't have the time or the people to come out, if you have the keys just take the car back and make sure you tell your insurer you got it, that's all we can do.
masfuerte 5 hours ago [-]
I've heard that this is quite common. The criminals drive the car a short distance and leave it for a few days to check if it has a hidden tracker. If the vehicle isn't recovered they assume it is clean.
deltoidmaximus 5 hours ago [-]
The story I heard is the car is stolen and used briefly to commit other crimes like robberies or general mischief. Then the car is discarded leaving the surveillance trail largely dead or at least difficult to follow.
gambiting 5 hours ago [-]
Depends on the vehicle. Range Rovers are commonly stolen to be exported for countries where registering them is not a problem and where buyers are likely to pay cash. Some cars are stolen to be broken up for parts, some are used for other crimes, and some are exported and re-sold as-is. LR products are very frequently in that last group.
jcattle 15 hours ago [-]
I'm not suprised that in the swiss economy no one bats an eye at 1000 CHF bank notes. After all the swiss are historically known for being the classy alternative to launder and store your ill gotten gains from, for example, your stint as the dictator of an African country.
But there has been some changes in recent years so I don't know how it is today.
roromainmain 4 hours ago [-]
The usual (gu)estimate is that 1 to 3% of UK GDP is exposed to suspicious foreign wealth. It is estimated to be 15 to 20% of Switzerland GDP today.
So indeed, it doesn't make sense for Switzerland to limit circulation of cash or increase tracability.
pjc50 14 hours ago [-]
The absolute peak of that was, of course, during WW2 when vast amounts of stolen or looted money, gold, and other valuables ended up being laundered through Switzerland and kept in anonymous accounts. Mostly by Nazis, although not exclusively. There was a long campaign of litigation by the descendants of Holocaust victims to get some of it back.
In the 21st century the US eventually pressured them into not being a tax haven for anonymous money hidden by US nationals.
The twin questions of tax and terrorism remain as pressure against money laundering.
iamacyborg 6 hours ago [-]
> The UK did this already and ML is out of control there: criminals just don't care.
From 18th May:
“A new £30m High Street organised crime unit has been announced by the government after the BBC's year-long investigative reporting into illegal mini-marts, vape shops and barbers.”
Of course, remains to be seen what, if any, impact this ends up having.
evanjrowley 5 hours ago [-]
Which AML books would you recommend?
marysol5 14 hours ago [-]
>To a person who spent their life in Britain this sounds absurd because the British government has - true to form - been trying to wipe cash out for many years to improve surveillance.
Oh come of Facebook for christ sake. Absolute hogwash.
arttaboi 19 hours ago [-]
Here's an anecdotal thought: AML laws surprisingly work well to discourage offline transactions by tax-paying citizens, helping maximize tax reporting and improve tax collection. As a result, governments continue to strengthen and expand laws in that direction.
Gigachad 18 hours ago [-]
It used to be super common for many small businesses to be cash only or a 10% discount for cash. Likely the main driver for this was tax avoidance. I haven't seen a cash only business since covid.
With a dwindling number of legitimate cash users, any business that is pulling in huge sums of cash well beyond the average is going to look increasingly suspicious.
efsavage 7 hours ago [-]
> I haven't seen a cash only business since covid
Collectibles (e.g. trading cards) are still a "cash is king" market. Some dealer only take cash, virtually all of them prefer it, and offer steep "discounts" (lack of markup) for cash.
nradov 5 hours ago [-]
Probably a lot of chargebacks from kids using their parent's credit card and the like.
nandomrumber 17 hours ago [-]
> With a dwindling number of legitimate cash users
Services for laundering cash are going to see a huge uptick in turnover.
You put the cash in the local slot machine, the slot machine owner then purchases legitimate services from your wife / cousin / other family member’s business.
Or you rent a hole in the wall location massage business that that maybe legitimately employs one or two people but on the books they manage to see back to back clients for 20 hours a day.
Another good one is hair dresser / barber, they often take cash.
y-curious 17 hours ago [-]
My barber loves talking about “creative tax tricks” he does as an all cash joint. More interesting was how he managed to purchase a home despite having very little reported income. It involved friends in the “legitimate” cannabis industry in California, but he got it done.
I’m not sure the stress is worth (presumably) 20% or so savings for his income.
convolvatron 7 hours ago [-]
its not just his income. everybody in the cash economy wins. if I take cash and pay my employees in cash, that's a few transactions the tax man misses out on.
quite a bit of labor runs on cash. you can usually get a deal for a lot of services by paying in cash. sometimes the floor manager will take cash and never even report the transaction to the business much less the tax man (I rent forklifts and get plating work done this way).
selfhoster1312 16 hours ago [-]
> Likely the main driver for this was tax avoidance.
It's not just that, though. It's common here in France for credit card operators to have fees in the 5-10% range (or 0.30€ per operation + 2% of the amount). That's why you often see signs « card accepted above 10€ », and that's why your local shop will probably not mind if you're missing 10 cents when paying cash.
objclxt 16 hours ago [-]
> It's common here in France for credit card operators to have fees in the 5-10% range (or 0.30€ per operation + 2% of the amount)
Interchange in the EU is capped at 0.4% for credit cards. Typical costs for processing are much lower than 5-10%.
For example, Adyen charges the 0.4% interchange + their fee of 0.6% and a flat 0.11€. On a 10€ transaction, that's 2.1%.
In most cases this is cheaper than handling cash. When you accept cash, you have to pay somebody to close and reconcile the drawer, take the cash to the bank (or have a security company do it for you), account for shrinkage / mistakes...it's a bit of a myth that cash is cheaper for businesses to handle, especially in places like the EU where card interchange rates are highly regulated.
Now of course, if your cash is not going the usual routes and isn't getting accounted for in the books...that equation can change.
marysol5 14 hours ago [-]
Had a conversation with the landlord of my local pub a few years back, he said he'd go "Card Only" if it wasn't for the handful of patrons that refuse to use card, couple of which are the "Cash is King" Facebook types.
And he was paying his staff under the table in cash anyway! But would still rather just withdraw from the business account, rather than having to deal with handling of customer cash every day.
dhosek 5 hours ago [-]
It varies on the country. In Mexico, it’s not uncommon for landlords to want rent paid in cash (which can be a challenge in that one has to safely transfer tens of thousands of pesos from the bank to the landlord on a regular basis in a country with high crime rates), although the numbers of cash-only businesses in Mexico has been declining. On the other hand, the main thing I use cash for in the US is to get quarters for the laundry machines in my apartment basement.
TFNA 5 hours ago [-]
> the main thing I use cash for in the US is to get quarters for the laundry machines in my apartment basement.
In Finland I was paying for apartment-building laundry machines with my phone in 2005. Mind-boggling that in the US, those still require quarters over two decades later.
smartbit 13 hours ago [-]
I've seen barbers before Covid not accepting cash, after Covid happy to accept cash. The Covid rules for subsidies were very strict, sometimes having to repay all as they didn't fully comply. Cash gives protection against bankruptcy due to unfortunate rules.
marysol5 14 hours ago [-]
Still lots of builders/tradies in the UK who do "for cash".
Also lots of takeaways, they'll be on JustEat/Uber Eats and cash-only in store which is a PITA. My local chippy is cash only and no-delivery. I can't find a single record for a recorded business, or health rating either!
Cthulhu_ 17 hours ago [-]
I've mainly seen it in small businesses - e.g. food vendors - but instead they charge extra for using electronic payment methods. Also to offset the costs they're making on offering it I suspect, but it does encourage people to pay with cash.
graemep 15 hours ago [-]
> but instead they charge extra for using electronic payment methods.
That is illegal in the UK. That is why many trades people here will accept bank transfers but not cards.
marysol5 14 hours ago [-]
Even "minimum charge on card" is against VISA/MC rules. But it's still around.
graemep 14 hours ago [-]
Varies between countries, and card company rules are not quite as threatening as actual laws.
gambiting 13 hours ago [-]
>> and card company rules are not quite as threatening as actual laws
Well, they are plenty threatening in the sense that if you don't follow them, they will refuse doing business with you, which suddenly means you can't accept cards at all, which can kill a business entirely.
Gigachad 17 hours ago [-]
A card tx fee of around 1% is common. At 10% it’s tax evasion.
AnthonyMouse 4 hours ago [-]
If you sell items for $5 and the card charges e.g. 2.9% + $0.30, that's >11%.
On top of that, merchants carry the risk of chargeback fraud or stolen cards, and in some industries that can be another double digit percentage by itself.
graemep 15 hours ago [-]
> As a result, governments continue to strengthen and expand laws in that direction.
Which creates national security and sovereignty issues. Cash is robust and decentralised. There is a good reason Sweden went from pushing cashless to advising people to keep cash at home for emergencies, and were at least considering an obligation to accept cash for small transactions.
rwmj 14 hours ago [-]
> Which creates national security and sovereignty issues
Are you talking about people who don't pay tax? They create very large national security and sovereignty issues. Countries that don't collect much tax have real problems with both of these.
> There is a good reason Sweden went from pushing cashless to advising people to keep cash at home for emergencies
The key phrase being "for emergencies".
graemep 14 hours ago [-]
> Countries that don't collect much tax have real problems with both of these.
Nothing like as bad as the potential problem of your economy grinding to a halt.
There are other ways to deal with tax evasion. Those countries usually do not have good systems. If you investigate properly, design tax laws properly, chuck a few people in jail, etc. the problem can be solved.
Not using does not close loopholes, or prevent corruption, or stop people sending money offshore.....
> The key phrase being "for emergencies".
If you go cashless you will not have the infrastructure to use cash in an emergency.
pjc50 14 hours ago [-]
The national security and sovn. issues are when the US threatens to turn off the system, or starts sanctioning individual non-US nationals.
graemep 14 hours ago [-]
Or an enemy state of criminals attack centralised systems. Or even just a failure. I think Sweden's biggest concern is the threat posed by Russia.
anigbrowl 7 hours ago [-]
As a consumer, I like paying with cash. It's more convenient for me to think about the amount I have on me than to maintain a mental inventory of bank/card balances all the time. That's my business, not anyone else's.
marysol5 14 hours ago [-]
That's just a disaster planning POV. If you've ever been in a shop where the EPOS goes down, you'll know how chaotic it is. And that's just a macro scale.
11 hours ago [-]
harrouet 14 hours ago [-]
How can one write about money laundering without talking about crypto currencies ?
dandaka 5 hours ago [-]
Going from crypto to fiat and back is an extremely monitored and regulated route. It might be an easy way to settle between counterparties, but a difficult one to launder.
tasuki 6 hours ago [-]
I guess I don't really understand it. I understand how a bank robbery leads to dirty money - the bank has the serial numbers.
In what way is money from selling drugs "dirty"? Why does it even need laundering?
rwmj 6 hours ago [-]
From the article:
> One of these [recommendations is] a change in the legal attitude to drugs [...] with the significant weakness that it is very unlikely to happen in a reasonable time frame
bflesch 5 hours ago [-]
Criminals are not afraid of the police but afraid of the IRS. Smuggling and selling prohibited goods is super easy, but then you suddenly have a shitload of cash but everybody knows you as an unemployed bum without career, and they would report you to authorities if they see you in a supercar. They need a cover story and career that allows them to "earn" money without raising any suspicion.
As the other commenter said, "Ozark" is a really good show about this.
dhosek 5 hours ago [-]
Breaking Bad was another show that addressed some of the issues with Walt buying a car wash as a way to try to launder the drug money although the problem was that there was too much money (thus the 55-gallon drums of cash buried in the desert).
AnthonyMouse 4 hours ago [-]
> the problem was that there was too much money
In real life, wouldn't they just open another car wash? Even in the show, Los Pollos Hermanos was a chain.
gwbas1c 2 hours ago [-]
What became clearer the 2nd time around was that Walter White was a horrible criminal who's downfall was that he was greedy and didn't know when to stop.
AnthonyMouse 2 hours ago [-]
The show is a show. Do the real life drug cartels "know where to stop"? They basically own some countries at this point.
UltraSane 6 hours ago [-]
Dirty means it comes from illegal activities. You need to create a plausible clean source of the money before you can safely spend it.
tasuki 6 hours ago [-]
Then I don't understand how the money from the sale of the agricultural equipment is "clean". Surely someone can think to ask: "where did you get the money to buy all that agricultural equipment?"
AnthonyMouse 3 hours ago [-]
The value of something depends on its condition.
Suppose a piece of equipment has a market value of $200k if it's working, but only half that if it's in need of major repairs. They go to a farmer and offer them $100k plus another $100k piece of equipment for the $200k one, but instead of listing it as a $200k transaction, they specify the condition of the expensive one as non-operational and list only the $100k in money. The farmer is happy because they get to write off a $100k loss on their taxes and get the other $100k piece of equipment off the books. The other party then claims to have repaired the $200k equipment even though it was never broken and sells it for $200k, thereby laundering $100k in dirty money.
This is why attempts to prevent money laundering have extremely low effectiveness. All you need is two parties, one of which wants to get something of value off the books, the other other of which wants to get clean money on the books. They engage in an on the books transaction and an off the books transaction at the same time, account for the value of the off the books transaction in the price for the on the books transaction, and agree on a reason for that to have been the price which is plausible but hard to verify.
UltraSane 6 hours ago [-]
"where did you get the money to buy all that agricultural equipment?"
usually loans from banks. Farmers tend to have a lot of debt.
SpicyLemonZest 6 hours ago [-]
Someone can, and that's indeed a common way for criminals to get caught. But a bank won't let you open an account at all if you don't have an explanation that's at least plausible. How much further effort a criminal invests depends on how competent they are and how much they want to reduce the risk of getting caught by some review or another.
5 hours ago [-]
6 hours ago [-]
clueless 6 hours ago [-]
see the show Ozark on Netflix
6 hours ago [-]
seanhunter 17 hours ago [-]
Aside: The author of this article wrote a fantastic novel that not a lot of people know about called “The Debt to Pleasure”. One of the best instances of the “unreliable narrator” I’ve ever read.
jcattle 14 hours ago [-]
Good to know, thanks! This article was such a breath of fresh air compared to the usual "LLM-assisted" writing you get.
Just sentences like this:
> This isn’t just a problem for far-off countries of which we know little, like the EU and the US and China. Here in the UK [...]
So good! I feel like I'm becoming an old cynic but if it's the tenth time on the day that I read an overdramatized "It's not X, it is Y" in an article, actually good writing just hits different.
pjc50 14 hours ago [-]
This is the London Review Of Books. They will be one of the last bastions of non-AI writing, because they actually care.
Gigachad 11 hours ago [-]
It’s depressing how hard it is to find anything worth reading on HN lately. Everything is either an advert or slop essay.
The article here is outstanding.
conductr 9 hours ago [-]
Not a fan of AI writing but I find sentences like that to be fluff and would prefer a more concise article overall. That would also have been my critique prior to AI and is the reason I only made it about half way through.
stdbrouw 16 hours ago [-]
Phenomenal author indeed. "Capital", a novel about the financial crisis and bankers on the hedonic treadmill, is wonderful too. Too bad either Lanchester or his publisher has beef with Amazon, most of his work is not available as an ebook.
bdr 6 hours ago [-]
I enjoyed it too, a long time ago, and some sentences have stuck with me. This is the first time I’ve seen someone mention it. Felt inspired by Pale Fire.
Fire-Dragon-DoL 22 hours ago [-]
In Italy there is a very aggressive law against money laundering: if you withdraw more than 1k cash, it triggers a call to the police.
I know it's the same if you do it over multiple days.
I think it has been relaxed a little bit later on, but in Italy everybody does the "I'll charge you X less without VAT" (which is 23% in Italy, I should point out), so this is also fighting that.
wmf 21 hours ago [-]
In other words, the Italian police are flooded with more reports than they could possibly investigate.
rectang 20 hours ago [-]
A great opportunity for selective enforcement!
wmf 20 hours ago [-]
Also parallel construction. "We caught him due to reports from his bank." (That's not how they caught him but those reports did exist.)
wood_spirit 17 hours ago [-]
Presumably the police computer system is told about the transfers automatically and it has no capacity problems. I know my own country has long had such a system and these days is almost entirely cashless.
Tangurena2 4 hours ago [-]
Italy has had some very widespread tax avoidance. Retailers have to use thing called "fiscal printers" to print receipts. These printers store data for the tax authorities to download. There are also fiscal police who would fine you (the customer) if they catch you coming out of a retail place with purchases and you can't show them a receipt.
Gigachad 20 hours ago [-]
That wouldn't help in the situations described in the article. For example where individuals buy drugs with small amounts of cash, then that cash is used to buy things like luxury watches and iphones, then those items are taken overseas and sold.
Seemingly the only effective way to solve this would be to ban purchasing highly resellable items with cash and requiring that cash to be deposited in to the system first.
tony69 17 hours ago [-]
In Italy, it’s illegal to pay in cash anything over 5000 euros
y-curious 16 hours ago [-]
Ok, but 5 smurfs buying 5 €4999.99 watches is still €25k
Gigachad 17 hours ago [-]
Sure but presumably you could buy as many $4000 handbags and watches as you want. If it’s not being tracked it would be hard to pick up.
Fire-Dragon-DoL 19 hours ago [-]
You cannot have a transaction in cash of that size. Loundring is about converting the dirty cash back to normal money, but the idea is to force you to go through a bank
BLKNSLVR 21 hours ago [-]
Does that mean it's illegal, or that they'll just come knocking to investigate?
I wonder if the "it's my money, I can withdraw it if I want" argument is good enough to send them on their way? (in addition to $1,000 being such a small amount as to be less-than-trivial when it comes to the overall problem of money laundering).
ExpertAdvisor01 21 hours ago [-]
I think the limit is 10k and withdrawals over 1k get bundled.
If you hit the limit you get reported to the Unità di Informazione Finanziaria (Financial intelligence unit) and what they do is under their discretion.
Fire-Dragon-DoL 19 hours ago [-]
Oh so it was raised back to a higher amount
iririririr 21 hours ago [-]
withdrew 2-4k rent for a few months in 23 and never saw any cops.
HDBaseT 20 hours ago [-]
You mean they implemented laws under the guise of "money laundering".
They just want to track what you spend your money on, that's step one.
Step two is to restrict what you can spend your money on, although this is a partial side effect of part 1.
gobdovan 17 hours ago [-]
You're onto something, but from some Romanian local investigations and public statements into similar cluster of laws [0], it's just something banks lobby for, so they can have more control and consolidate their place in any transaction chain. Maybe govt benefits a little, but when you see limited cash withdraws or commercial transactions requiring a bank system, it's usually private gains at play.
Actually the privacy legislation in Italy is pretty strong. With the gdpr, banks have more challenges to do what they do with data in the US.
Government might be tracking everybody, the goal of the law for sure is that.
It's hard to say what happens with all of that.
margalabargala 18 hours ago [-]
> Step two is to restrict what you can spend your money on
Where do people get these ideas? How do they sincerely hold them?
No non-religious government wants to restrict what you can spend your money on. They want to get a cut of your money, but otherwise it's strictly better for them if you spend as much of it as possible.
If they don't want you to have things, they just attack those things directly, like hard drugs or weapons. No need to restrict your ability to purchase.
Cider9986 17 hours ago [-]
>In July 2025, Visa and Mastercard pressured major digital storefronts Steam and Itch.io to delist thousands of adult and NSFW games.
margalabargala 7 hours ago [-]
Yes, that's exactly what I'm talking about.
Let's ignore the fact that that was done by private companies and not directly by a government.
The mechanism is to make it so undesirable objects are not available for sale. The above comment is implying these things would remain legitimately for sale as normal, but you would be unable to spend money on them.
mike_hearn 17 hours ago [-]
People get these ideas from the numerous examples of cases where it happens.
POSWID* says that money laundering laws are intended mostly to keep the proles and other people within the system honest, while providing a clean and easy system for people with enough money or cachet to bypass it.
" Bullough gives the example of a Mexican drug dealer who smuggles product across the border to the US. The drug in question would once have been marijuana, then cocaine, and is now likely to be fentanyl, which is cheap to manufacture and easy to conceal. The drugs are sold in the US for cash, which is used to buy, say, agricultural equipment. "
Wouldn't the person buying the tractor in the US for $$$ have to show where that money came from? Can you show up to John Deere with over a million dollars _in cash_?
glitchc 19 hours ago [-]
The short answer is yes. You can buy cars, trucks and tractors for cash. The more expensive the car, the easier it often is. Luxury cars in particular are routinely bought and sold for cash.
phil21 10 hours ago [-]
Not in the US without the dealer doing all the same work a bank accepting $100k of cash in a duffel bag would be doing. Plus filling out a suspicious activity report on top of it all. They might have a real hard time explaining to the feds that they truly did "know their customer" from a simple form and a photocopy of your ID.
Some dealers might be willing to do this for you, but most will not. They will direct you to your local bank to deposit the money and get a cashiers check instead. They do not want the liability of it all. Perhaps better chances at the Ferrari dealer you've bought 14 cars from over the past 30 years I suppose?
I asked my (luxury) dealer if I could pay cash the last time I bought a car and they basically said “hell no, we haven’t done that in over a decade”. The risk of being caught up in some drug money investigation or whatnot is too great.
Coincidentally showing up to your bank with a duffel bag worth of cash to deposit is a great way to both get your accounts closed, as well as be added to a blacklist so it will be very difficult to open an account anywhere else.
Tangurena2 4 hours ago [-]
I used to work for GM as a field rep (in the 80s). There had been enough instances where finance managers skimmed/embezzled some of the cash (even before the feds required filing SARs) that dealers stopped taking cash as a policy decision.
margalabargala 19 hours ago [-]
Luxury cars are frequently bought outright without debt, yes.
Literal cash, as in actual paper pieces of money, is not a common medium to do so.
dataflow 19 hours ago [-]
> Luxury cars in particular are routinely bought and sold for cash.
Cash? As in hundred dollar bills?
caspper69 19 hours ago [-]
Yes, duffel bags full.
But it doesn't take too many cash purchases that are not inline with your tax returns before somebody is going to start snooping around.
edit: although sometimes, a lot longer than one might expect.
dataflow 17 hours ago [-]
> Yes, duffel bags full.
Citation needed? Where did you hear that this is a routine occurrence? That seems risky for everybody involved, and it requires a report to the government from the seller.
alibarber 14 hours ago [-]
Selling a car usually does require a report to the government. Why would the seller care what happens down the line to the buyer?
margalabargala 6 hours ago [-]
Because the legal system in most Western countries is set up that the seller bears liability for laundering money if they accept duffel bags of cash for a car without the same documentation a bank would require.
cucumber3732842 4 hours ago [-]
This is absolutely not true in the US. Are you trying to tee up one of those "the US is not a developed country" type quips that are popular around here?
A dealership may take issue with it but a private party accepts no liability by taking cash.
margalabargala 4 hours ago [-]
Firstly, I said "Western" not "developed", you need to calibrate your quip detector lest you become what you dislike.
Secondly, while it's possible to construct a private party transaction in the US where this is fine, if the person spending the duffel bag acquired the money illegally, you the seller are liable if you should have known. "Willful blindness" when accepting illegal proceeds makes you liable too. See 18 U.S.C. § 1957
Maybe I misspoke by saying you would be liable for laundering specifically, but certainly accepting that money is a crime if you have any reason to think it was ill-gotten. And that's a huge risk that no one wants to take on.
mikeodds 18 hours ago [-]
Disappointly small bag to buy most cars with 100 dollar bills
markvdb 17 hours ago [-]
I don't know about the US. The EU limit on cash transactions differs by country, with a legal maximum of 10k€. Belgium and the Netherlands for example are at 3k€.
cucumber3732842 6 hours ago [-]
These people aren't walking into the dealer. They have tractor dealers in Mexico.
They're paying cash for a 20yo bulldozer that leaks enough to be a liability, loading it on a trailer and sending it home.
cwillu 17 hours ago [-]
Unrelated, but I love finding lower-case numbers in the wild!
(Note the two and the zeros in “$20 billion to $80 billion.”)
> I reckon the luxury watch trade is 80 per cent money laundering
Found this quote interesting given Europes richest person is the head of a luxury brand company.
I always wonder who was buying all this high end stuff - the concentration of wealth has created a more billionaires - but they aren't that many of them and there is only so many watches one person needs.
It also may explain why China is struggling to establish it's own luxury brands - the money laundering prefers that cross border flow.
ablation 11 hours ago [-]
All of Bullough's books are worth your time and variously go deeper into this very subject.
futune 5 hours ago [-]
I love "Let our Fame be Great", about the history of the peoples of the Caucasus. Strongly recommended.
dwd 19 hours ago [-]
I always thought the TV show Ozark was fairly accurate in it's depiction of money laundering. The family would buy a small business that they could inject cash and cook the books with fake sales.
wutwutwat 17 hours ago [-]
any tips based job; serving/waiting, stripping, bartending, etc. gig/service work. freelancer websites that offer escrow, etc. Shopify. Hell, github sponsorships. You don't even need a physical store these days, or a business for that matter. Cashapp even. The list is endless and it's easier than ever.
Now I just need some dirty money to go through the hassle of cleaning
dustfinger 21 hours ago [-]
Here are the last two sentences:
> Governments don’t do anything about the status quo, for a number of reasons: it inconveniences them to look too deeply into the darker corners of their own financial systems, and they make money from printing their own currencies and don’t much care how that cash is used. But most of all, they don’t do anything about it because they haven’t got a clue.
The last one couldn't be farther from the truth, and the first one couldn't be farther from a lie.
zuzululu 18 hours ago [-]
It's very simple, there is more incentive for money laundering than there is fighting it. It's the same reason there are more lawyers working for large companies vs small guys. The invisible hand that determines the structure of our society.
Gigachad 17 hours ago [-]
Seems like the reason Australia dragged its heels on AML changes for property purchases. Propping the property market up was more important than stopping crime.
HlessClaudesman 17 hours ago [-]
In war the side that knows what they are fighting for generally wins.
greatgib 4 hours ago [-]
Th guy says that they don't know where the cash is so it is "obviously" used for money laundering...
But even for money laundering, the cash has to buy real things or it would be useless.
So a total sack of bullshit. The kind or lobbyist that are paid to propagate lies and fear in order to justify new regulations that they would like to pass to have more control. Might also really probably be pushed by a big electronic payment corporation or one of the big banks that would like to ensure to have the income of the electronic transactions and not the cost of managing cash.
yieldcrv 21 hours ago [-]
The state's ability to track and criminalize people based on financial behaviors through deputized financial intermediaries is new, and temporary.
Outside of this social graph, where private cash transactions still exist, the state lacks power and relies on stigmatizing cash ownership, consumption, movement. This stigma is largely successful and ubiquitous but inconsequential to anybody that matters or has a lawyer of their own.
Electronic settlement of funds since the 1970s has allowed for the state to leverage financial institutions for records and enforcement. Electronic settlement without institutions since the 2010s removes that power from the government and is merely a reversion to the mean. Any delay in the prevalence of this is both user-error, social stigma, and a government's unfamiliarity with the reality that their own constitutions and documents that organize the state are things that have to be updated to actually remove an expectation of privacy from finance.
> We don’t know what successful money launderers are doing in the present moment. All we do know is what unsuccessful ones have been caught doing in the past.
One major and necessary fallacy inside the social graph is that electronic settlement between institutions assumes that the deputized institutions have blessed the funds and user as not money laundered. Only the user and who they transact with can trigger an investigation by the government at this point, by reporting the money for taxes or in a large withdrawal to cash out of the social graph, without further laundering it. This user error is mostly mitigated as soon as cross border payments are done, because the next financial institution doubly assumes funds from another country's banks are clean. The banks and sovereignty become the washing machine inside the electronic settlement system.
This is doubly important to realize, because it's the tip of the iceberg in brand sovereignty. One country's illegality is not another country's illegality.
You can't simultaneously be for a stigma against withdrawing large amounts of cash, while considering the Communist Party's capital controls to be oppressive. Removing one capital control, blesses the other.
This is a blind spot for most people, since they don't consider them to be the same things, but fortunately this cognitive dissonance highlights the reality. It is impossible to completely stigmatize and the capital routes around the stigma and all capital controls, unless the entire world is under a single totalitarian regime.
All while only the edges, moving between physical cash and electronic system, and moving cash between borders and the electronic system, are policed, in what could really only be the ultimate hubris of expecting the state to be involved at all.
And it's not just cash. Its assets too. The state is hoping for titled and electronic settlement of assets. In the last 30 years a systematic global dismantling of explicit "bearer assets" has been done, when the bearer assets were offered by the state. But this is also unsuccessful, as since the 2010s, the bearer assets created and settled without a financial intermediary have existed and been wildly popular.
All capital controls have been obsoleted while they were never fully implemented to begin with. No matter whether that's the idea of your neighbor holding a lot of physical cash, or a subject of the Communist Party in another country circumventing capital controls you consider oppressive.
This article covers the same points with a wildly contrived conclusion: To attempt to change anything in favor of the state being more effective at enforcing its invented crime of money laundering instead of curbing the actual illicit behaviors. For reasons that are assumed and unexplained, so it's impossible for me to change my view on. My view is simple - capital controls are dead and a waste of time. The article and both books it references actually agree on that. My other view is that the state should just do classic investigative work on illegal behaviors which means finding the people involved and subpoena-ing them, something it seems to have forgotten how to do in favor of relying on deputized intermediaries who are temporary, ineffective, and inconvenience just the law abiding.
throwaway290 20 hours ago [-]
Where cash is stigmatized? I haven't seen such a place except PRC.
Most people want government to be able to seize assets of baddies. It is possible with cash, it is possible with banks, hardly possible with crypto.
The technology to scam people at scale with untraceable emoney is not everybody's cup of tea.
Speaking from a country that invaded its neighbor, for our government (as well as north korea) it is lovely to have a way around sanctions. Libertarian crypto bros of the west are a godsend.
They are also a godsend to current American president which loves a nice side of washed crypto along with all the other theft.
It is absolutely possible to like cash and dislike crypto
protocolture 19 hours ago [-]
>Most people want government to be able to seize assets of baddies.
I dont, not while they get to decide who the baddies are.
MyMemoryfails 18 hours ago [-]
This is correct attitude, for example some people actually got arresred for supporting ukraine efforts on war. I disagree that all my assets must be seized because i donated few bucks for sake protecting invaded country.
Ukraine event's is prime example why finanical privacy is important. I think we're solving taxing issue from wrong angle, we should be look this another angle: Merchants should be identifiable and taxable while customer stay private. GNU's solution "Talor" is very interesting and promising.
orbital-decay 17 hours ago [-]
Everyone in China has to and will accept cash in practice (no idea about big transactions though). Cash is also more frequent among locals in remote places.
Also if you're talking about Russia, people are switching back to cash en masse because cashless transfer between people is essentially half-criminalized. You run the risk of getting all your bank accounts blocked instantly on mere suspicion or for things outside of your control, with almost no real rules, accountability, or practical ways to push back. It's the way to avoid the runaway government process in the first place.
vajrabum 8 hours ago [-]
I don't understand what is meant by "hardly possible with crypto." I've been hearing that for a long time but I've also heard so many stories about theft of crypto assets and seizures by government. In the US that seems to have slowed to near nothing with the current administration but it doesn't seem to be a capability issue. Or maybe I misunderstand you or the situation?
padolsey 18 hours ago [-]
>Where cash is stigmatized? I haven't seen such a place except PRC.
I don't know about stigma, per se, but there are a few places where businesses have a pretty explicit legal right to refuse cash, UK, Netherlands, Sweden, US. Oddly in PRC refusing cash is illegal.
marysol5 14 hours ago [-]
Because "cash" isn't actually real, it's entirely a form of completion of a contract. The same contract that you could agree to complete by trading chickens, or bottles of bath water.
yieldcrv 20 hours ago [-]
there is high consensus on that, but not high enough to enshrine it into the constitution. in countries with strong rule of law, the courts have continued to uphold this whenever the state gets bold enough to move on a previously tolerated "baddie"
capital, as an aggregate expression of people's desires, moves like water. if will flow through any small opening
capital controls will flow through any weak link, whether that's a Shanghai free trade zone, a freeport at the airport in JFK or Zurich, physical cash, illiquid assets traded through a trust, or natively in crypto, or crypto wrapped within the same aforementioned structures, no matter what the prevailing or commoner's view is everywhere else in the region
even countries that can change on the whims of an all powerful head of state, they don't really mess with the capital because it drives everyone else away and reduces the head of state's own liquidity and economic driver.
To be clear, there are Firefox add-ons distributed at addons.mozilla.org that allow the user to add/modify/delete HTTP response headers and bodies
One can use these to insert a Content-Security-Policy, either via HTTP header or <meta> tag, that disables Javascript and CSS
Personally, I use a local forward proxy to insert HTTP response headers, not a browser add-on, for experimentation and learning
As a matter of practice, I read HTML with a customised text-only browser that does not auto-load resources, nor does it interpret Javascript or CSS. There is no DNS prefetching or other nonsense. As such, a "Content Security Policy" is not necessary
Cider9986 17 hours ago [-]
BPWC is good as well, but I would keep it in a separate browser profile.
20 hours ago [-]
photios 19 hours ago [-]
In this day and age "money laundering" just means "not bending over and letting the state tax you to oblivion". TFA is just scare mongering.
People need to learn about Bitcoin.
Cider9986 17 hours ago [-]
You might want to check out Monero. It's like Bitcoin but actually usable for purchases. And it's private.
matheusmoreira 6 hours ago [-]
Agreed. Monero is what Bitcoin should have been from the start. Extremely underrated cryptocurrency.
cyberax 18 hours ago [-]
> People need to learn about Bitcoin.
Indeed. Bitcoin is now a major player in the money laundering business. NFTs are so much better than fake pocelain!
nout 6 hours ago [-]
That's not true. Most money laundering is in USD and then stablecoins (USDT, etc). NFTs are a thing of the past and the big majority was not on bitcoin anyway. So no, bitcoin is not a major player.
If you would completely eradicate bitcoin (which is not possible), you would solve (I'm guesstimating) 0.3% of money laundering.
photios 18 hours ago [-]
> I can invalidate Bitcoin, by comparing it to NFTs.
I'm sorry, that's not how it works.
MDCore 17 hours ago [-]
It's not so much invalidating Bitcoin - Bitcoin is valid and effective. Unfortunately what it is extremely effective for is money laundering and tax evasion (which was what your original comment seemed to advocate for.)
cyberax 6 hours ago [-]
Yes, it does. You just make a round-trip through one of the exchanges.
I like cash because it's direct, and where possible I avoid paying by card because I don't want the merchant to pay fees to third parties.
In Europe, most of the time, using cash doesn't imply avoiding taxes on the transaction, but having cash is essentially sovereignty.
In a lot of cases it's a lot higher than just taking card.
It's also worth noting there are also huge fixed costs for credit card transactions. We're currently upgrading our pinpads and it's been an absolute nightmare to get the right parts in just for physically connecting the damn things to our counters, we lost almost a whole day of backend POS access for our vendor to push a required update, and I'm looking at more fees to be able to support other types of cards which require POS certification.
We strongly prefer our customers use cash.
The costs to handle cash are fairly low. He bought one of those fancy cash counters like they have at the bank for a few hundred. He also bought one of those cheap little ATMs for perhaps $500 and charges $1 to take out cash. He keeps $2,000 on hand at all times between the safe and the ATM itself. Otherwise, he just stops by the bank two blocks down the street to deposit profits. As for security, well, they just carry concealed weapons.
The ATM paid for itself in the first month, presumably also the cash counter machine. Notably they did have one counterfeit $100 come through that they forgot to scan. I suppose that’s novel to cash although chargebacks on cards also do occur.
All I can say for sure is no store I’ve ever encountered has operationalized the newfound ability to differentially reject some cards yet. I am starting to see grittier establishments offer 5% cash discounts more frequently than they used to, and I’m always happy to pay cash when they do.
But when there’s no discount, why would I forgo better accounting and 3-5% back in points?
Do you have a source for this? Often times merchants don't accept American Express because it charges higher fees [1].
[1] https://www.bankrate.com/credit-cards/business/why-american-...
Incidence is very much on customers, but (high interchange fee) credit card users are getting a rebate of most, if not all, of that. It’s the cash users who AREN’T getting a rebate, and thus the incidence is on them (and people using other low-or-zero cashback payment methods).
Moreover, we should encourage every retailer to offer this, because getting 2% back (or less) while paying 3% more is not just a net loss, it's also worse for privacy.
Second, I submit that money laundering should not be considered a crime at all. Monitoring it (for example, banks required to report large cash transactions to the government) just leads to mass surveillance of innocent people.
Transferring money from A to B - why should that be a crime? The point of anti-money-laundering laws is that the money generated at point A may have been generated illegally. It isn't the money transfer that is the problem, it is the illegal activity. The police need to put in the effort to prosecute that illegal activity.
This is reminiscent of the continual pressure to break end-to-end encryption. The police want an easy way to do their (admittedly difficult) job. But the price is just too high: mass surveillance, and many false positives, affecting the general populace.
You're correct on the privacy implications. It's shocking how much data AML monitoring companies have collected about you, there's more data points than any single person could think up. These aren't entities owned by the government - they're private companies.
Also yes money laundering does not require cash but I think the author is highlighting the scale of it. Most countries tax consumption a.k.a VAT and 'hidden transactions' such as cash transactions bypass that.
You can be anti-anti-money-laundering but then you also either have to be a complete anarchist or completely anti-taxation and anti-data-collection by corporations and yet still have a reasonable argument for how this will result in the ability for society to have a government.
I'm not saying the system is perfect - far from any means. However the utopia you describe seems infeasible to me.
Its effectiveness is shockingly poor and rounds to zero:
https://www.tandfonline.com/doi/full/10.1080/25741292.2020.1...
Curious how that line is received within the HN crowd.
Suppose someone has a million dollars in cash and wants to turn it into "clean" money in a bank account, or transfer it to another country. They pick any goods with a high cost to weight ratio and a third party sale value close to its store price, list them on any marketplace for a competitive price in the country they want the money to end up. When someone orders it from them, they use the dirty money to buy one at any retailer, ship it to buyer, get paid in clean money. When operating at scale they could even get the wholesale price for the goods and be turning a small additional profit from the operation.
What does cryptocurrency add to this? Maybe slightly lower overhead or setup time? If it didn't exist, would they actually be prevented from laundering the money?
The IRS sees a clean million dollars in your bank account. They ask "how did you get that?" You answer "Oh I just sold this super expensive thing on a marketplace". Then they ask "Ok, but how did you get/buy this expensive thing?" What do you say?
No apriori principle can tell you what the ratio of 'genuinely circulating' to hoarded money should be. When money was gold or silver, as Bagehot says, the hoards in e.g. France were huge, but those in Scotland, where there was enthusiasm for the banks, were tiny.
A few minor comments.
My wife and I have owned and used 1000 CHF notes quite a few times in the past. The last two times we moved apartments I paid part of the moving fee with a 1000 CHF note. We've also bought furniture this way. Nobody was surprised to see this and the notes were accepted without question or comment. To a person who spent their life in Britain this sounds absurd because the British government has - true to form - been trying to wipe cash out for many years to improve surveillance. You can't get any high value notes there, they just don't exist, because the state assumes that anything it can't see must automatically be suspicious. And there's so much street crime, and the police care so little about burglary, it would be very dangerous to hold such notes. But in Switzerland it's safe and the government doesn't try to wipe cash out, so paying with high value notes is common. (Although bank notes are in no way as private as people assume and can be tracked quite well, because they don't tend to circulate far.) This situation makes a mockery of the recommendation to fight crime by removing high value bank notes. The UK did this already and ML is out of control there: criminals just don't care.
I looked into the case of George Cottrell once. The case against Cottrell collapsed because it was founded on entrapment (the eight months was a plea deal in the usual American fashion, and doesn't mean much). It boiled down to undercover FBI agents asking Cottrell, "how could we launder money" and he explained how to do it, in the way anyone familiar with the topic could. He didn't make any offers to actually do it, didn't do it, and that's why "could be jailed for up to 20 years" turned into an eight month plea bargain to let prosecutors save face. Then after he was released he trolled US LE by writing a book called "How to launder money". Usually not given is the subtitle: "A guide for law enforcement and politicians". It's not written for criminals but people love to omit that detail.
Carousel fraud in the EU is a huge problem that governments hate to talk about because they don't know how to fix it and fear that by talking about it, they'll just teach more people how to do it. It's an infinite money glitch but in the real world. It's interesting that the UK thinks they solved it. I suspect they didn't, rather, enforcement collapsed elsewhere and it became easier to just go back to other ways of scamming the government.
Yes, although this is mostly by capping the highest regularly circulating note at £50 after the war and then waiting for inflation.
> And there's so much street crime,
[mostly false]
> and the police care so little about burglary,
Sadly true (including "find my iPhone" reports; there was a joke during the Mandelson scandal that this was the one time the Met had managed to locate a phone)
> The UK did this already and ML is out of control there: criminals just don't care.
Yes, which makes a sort of orthogonal point about whether or not cash is actually important for this. There's the conspicuously suspicious businesses ("American sweet shops"), but also more complicated stuff going on (Scottish Limited Partnerships were in the news). Then there's all the Crown dependencies, which are a total financial wild west still.
> Carousel fraud in the EU is a huge problem that governments hate to talk about because they don't know how to fix it
God yes. This is a significant problem in VAT as a concept; I don't understand why the EU loves VAT so much.
Because it's easy money as taxation goes. Facing growing fiscal deficit and worsening credit score, the first thing the government in Romania did last summer was to rise the (general) VAT quota and cut on some VAT exceptions. It works quicker and more reliably than other means for securing the budget needs.
The VAT related fraudulent schemes are a problem in EU as many other things are, but they are investigated, often prosecuted, and written about. For anyone interested, more can be found at the European Public Prosecutor's Office's site: https://www.eppo.europa.eu/en/media/news
I'll give you one better. I know someone who had their nearly new Range Rover stolen in Manchester - reported to the police etc. Few days later, they found it parked at a car park near a big supermarket. Rang the police, they said well, if you still have the keys...just take it? And he was like hang on, you don't want to look at it, check for drugs, take fingerprints, you know, do any actual police stuff stuff around stolen property? And they were like nope, don't have the time or the people to come out, if you have the keys just take the car back and make sure you tell your insurer you got it, that's all we can do.
But there has been some changes in recent years so I don't know how it is today.
In the 21st century the US eventually pressured them into not being a tax haven for anonymous money hidden by US nationals.
The twin questions of tax and terrorism remain as pressure against money laundering.
From 18th May:
“A new £30m High Street organised crime unit has been announced by the government after the BBC's year-long investigative reporting into illegal mini-marts, vape shops and barbers.”
https://www.bbc.co.uk/news/articles/ce3pzwx449no
Of course, remains to be seen what, if any, impact this ends up having.
Oh come of Facebook for christ sake. Absolute hogwash.
With a dwindling number of legitimate cash users, any business that is pulling in huge sums of cash well beyond the average is going to look increasingly suspicious.
Collectibles (e.g. trading cards) are still a "cash is king" market. Some dealer only take cash, virtually all of them prefer it, and offer steep "discounts" (lack of markup) for cash.
Services for laundering cash are going to see a huge uptick in turnover.
You put the cash in the local slot machine, the slot machine owner then purchases legitimate services from your wife / cousin / other family member’s business.
Or you rent a hole in the wall location massage business that that maybe legitimately employs one or two people but on the books they manage to see back to back clients for 20 hours a day.
Another good one is hair dresser / barber, they often take cash.
I’m not sure the stress is worth (presumably) 20% or so savings for his income.
quite a bit of labor runs on cash. you can usually get a deal for a lot of services by paying in cash. sometimes the floor manager will take cash and never even report the transaction to the business much less the tax man (I rent forklifts and get plating work done this way).
It's not just that, though. It's common here in France for credit card operators to have fees in the 5-10% range (or 0.30€ per operation + 2% of the amount). That's why you often see signs « card accepted above 10€ », and that's why your local shop will probably not mind if you're missing 10 cents when paying cash.
Interchange in the EU is capped at 0.4% for credit cards. Typical costs for processing are much lower than 5-10%.
For example, Adyen charges the 0.4% interchange + their fee of 0.6% and a flat 0.11€. On a 10€ transaction, that's 2.1%.
In most cases this is cheaper than handling cash. When you accept cash, you have to pay somebody to close and reconcile the drawer, take the cash to the bank (or have a security company do it for you), account for shrinkage / mistakes...it's a bit of a myth that cash is cheaper for businesses to handle, especially in places like the EU where card interchange rates are highly regulated.
Now of course, if your cash is not going the usual routes and isn't getting accounted for in the books...that equation can change.
And he was paying his staff under the table in cash anyway! But would still rather just withdraw from the business account, rather than having to deal with handling of customer cash every day.
In Finland I was paying for apartment-building laundry machines with my phone in 2005. Mind-boggling that in the US, those still require quarters over two decades later.
Also lots of takeaways, they'll be on JustEat/Uber Eats and cash-only in store which is a PITA. My local chippy is cash only and no-delivery. I can't find a single record for a recorded business, or health rating either!
That is illegal in the UK. That is why many trades people here will accept bank transfers but not cards.
Well, they are plenty threatening in the sense that if you don't follow them, they will refuse doing business with you, which suddenly means you can't accept cards at all, which can kill a business entirely.
On top of that, merchants carry the risk of chargeback fraud or stolen cards, and in some industries that can be another double digit percentage by itself.
Which creates national security and sovereignty issues. Cash is robust and decentralised. There is a good reason Sweden went from pushing cashless to advising people to keep cash at home for emergencies, and were at least considering an obligation to accept cash for small transactions.
Are you talking about people who don't pay tax? They create very large national security and sovereignty issues. Countries that don't collect much tax have real problems with both of these.
> There is a good reason Sweden went from pushing cashless to advising people to keep cash at home for emergencies
The key phrase being "for emergencies".
Nothing like as bad as the potential problem of your economy grinding to a halt.
There are other ways to deal with tax evasion. Those countries usually do not have good systems. If you investigate properly, design tax laws properly, chuck a few people in jail, etc. the problem can be solved.
Not using does not close loopholes, or prevent corruption, or stop people sending money offshore.....
> The key phrase being "for emergencies".
If you go cashless you will not have the infrastructure to use cash in an emergency.
In what way is money from selling drugs "dirty"? Why does it even need laundering?
> One of these [recommendations is] a change in the legal attitude to drugs [...] with the significant weakness that it is very unlikely to happen in a reasonable time frame
As the other commenter said, "Ozark" is a really good show about this.
In real life, wouldn't they just open another car wash? Even in the show, Los Pollos Hermanos was a chain.
Suppose a piece of equipment has a market value of $200k if it's working, but only half that if it's in need of major repairs. They go to a farmer and offer them $100k plus another $100k piece of equipment for the $200k one, but instead of listing it as a $200k transaction, they specify the condition of the expensive one as non-operational and list only the $100k in money. The farmer is happy because they get to write off a $100k loss on their taxes and get the other $100k piece of equipment off the books. The other party then claims to have repaired the $200k equipment even though it was never broken and sells it for $200k, thereby laundering $100k in dirty money.
This is why attempts to prevent money laundering have extremely low effectiveness. All you need is two parties, one of which wants to get something of value off the books, the other other of which wants to get clean money on the books. They engage in an on the books transaction and an off the books transaction at the same time, account for the value of the off the books transaction in the price for the on the books transaction, and agree on a reason for that to have been the price which is plausible but hard to verify.
usually loans from banks. Farmers tend to have a lot of debt.
Just sentences like this:
> This isn’t just a problem for far-off countries of which we know little, like the EU and the US and China. Here in the UK [...]
So good! I feel like I'm becoming an old cynic but if it's the tenth time on the day that I read an overdramatized "It's not X, it is Y" in an article, actually good writing just hits different.
The article here is outstanding.
I think it has been relaxed a little bit later on, but in Italy everybody does the "I'll charge you X less without VAT" (which is 23% in Italy, I should point out), so this is also fighting that.
Seemingly the only effective way to solve this would be to ban purchasing highly resellable items with cash and requiring that cash to be deposited in to the system first.
I wonder if the "it's my money, I can withdraw it if I want" argument is good enough to send them on their way? (in addition to $1,000 being such a small amount as to be less-than-trivial when it comes to the overall problem of money laundering).
They just want to track what you spend your money on, that's step one. Step two is to restrict what you can spend your money on, although this is a partial side effect of part 1.
[0] (Romanian article) https://economedia.ro/parlamentarii-usr-au-depus-un-proiect-...
It's hard to say what happens with all of that.
Where do people get these ideas? How do they sincerely hold them?
No non-religious government wants to restrict what you can spend your money on. They want to get a cut of your money, but otherwise it's strictly better for them if you spend as much of it as possible.
If they don't want you to have things, they just attack those things directly, like hard drugs or weapons. No need to restrict your ability to purchase.
Let's ignore the fact that that was done by private companies and not directly by a government.
The mechanism is to make it so undesirable objects are not available for sale. The above comment is implying these things would remain legitimately for sale as normal, but you would be unable to spend money on them.
https://news.ycombinator.com/item?id=48338657
* https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_wha...
Wouldn't the person buying the tractor in the US for $$$ have to show where that money came from? Can you show up to John Deere with over a million dollars _in cash_?
Some dealers might be willing to do this for you, but most will not. They will direct you to your local bank to deposit the money and get a cashiers check instead. They do not want the liability of it all. Perhaps better chances at the Ferrari dealer you've bought 14 cars from over the past 30 years I suppose?
I asked my (luxury) dealer if I could pay cash the last time I bought a car and they basically said “hell no, we haven’t done that in over a decade”. The risk of being caught up in some drug money investigation or whatnot is too great.
Coincidentally showing up to your bank with a duffel bag worth of cash to deposit is a great way to both get your accounts closed, as well as be added to a blacklist so it will be very difficult to open an account anywhere else.
Literal cash, as in actual paper pieces of money, is not a common medium to do so.
Cash? As in hundred dollar bills?
But it doesn't take too many cash purchases that are not inline with your tax returns before somebody is going to start snooping around.
edit: although sometimes, a lot longer than one might expect.
Citation needed? Where did you hear that this is a routine occurrence? That seems risky for everybody involved, and it requires a report to the government from the seller.
A dealership may take issue with it but a private party accepts no liability by taking cash.
Secondly, while it's possible to construct a private party transaction in the US where this is fine, if the person spending the duffel bag acquired the money illegally, you the seller are liable if you should have known. "Willful blindness" when accepting illegal proceeds makes you liable too. See 18 U.S.C. § 1957
Maybe I misspoke by saying you would be liable for laundering specifically, but certainly accepting that money is a crime if you have any reason to think it was ill-gotten. And that's a huge risk that no one wants to take on.
They're paying cash for a 20yo bulldozer that leaks enough to be a liability, loading it on a trailer and sending it home.
(Note the two and the zeros in “$20 billion to $80 billion.”)
Found this quote interesting given Europes richest person is the head of a luxury brand company.
I always wonder who was buying all this high end stuff - the concentration of wealth has created a more billionaires - but they aren't that many of them and there is only so many watches one person needs.
It also may explain why China is struggling to establish it's own luxury brands - the money laundering prefers that cross border flow.
Now I just need some dirty money to go through the hassle of cleaning
> Governments don’t do anything about the status quo, for a number of reasons: it inconveniences them to look too deeply into the darker corners of their own financial systems, and they make money from printing their own currencies and don’t much care how that cash is used. But most of all, they don’t do anything about it because they haven’t got a clue.
The last one couldn't be farther from the truth, and the first one couldn't be farther from a lie.
But even for money laundering, the cash has to buy real things or it would be useless.
So a total sack of bullshit. The kind or lobbyist that are paid to propagate lies and fear in order to justify new regulations that they would like to pass to have more control. Might also really probably be pushed by a big electronic payment corporation or one of the big banks that would like to ensure to have the income of the electronic transactions and not the cost of managing cash.
Outside of this social graph, where private cash transactions still exist, the state lacks power and relies on stigmatizing cash ownership, consumption, movement. This stigma is largely successful and ubiquitous but inconsequential to anybody that matters or has a lawyer of their own.
Electronic settlement of funds since the 1970s has allowed for the state to leverage financial institutions for records and enforcement. Electronic settlement without institutions since the 2010s removes that power from the government and is merely a reversion to the mean. Any delay in the prevalence of this is both user-error, social stigma, and a government's unfamiliarity with the reality that their own constitutions and documents that organize the state are things that have to be updated to actually remove an expectation of privacy from finance.
> We don’t know what successful money launderers are doing in the present moment. All we do know is what unsuccessful ones have been caught doing in the past.
One major and necessary fallacy inside the social graph is that electronic settlement between institutions assumes that the deputized institutions have blessed the funds and user as not money laundered. Only the user and who they transact with can trigger an investigation by the government at this point, by reporting the money for taxes or in a large withdrawal to cash out of the social graph, without further laundering it. This user error is mostly mitigated as soon as cross border payments are done, because the next financial institution doubly assumes funds from another country's banks are clean. The banks and sovereignty become the washing machine inside the electronic settlement system.
This is doubly important to realize, because it's the tip of the iceberg in brand sovereignty. One country's illegality is not another country's illegality.
You can't simultaneously be for a stigma against withdrawing large amounts of cash, while considering the Communist Party's capital controls to be oppressive. Removing one capital control, blesses the other.
This is a blind spot for most people, since they don't consider them to be the same things, but fortunately this cognitive dissonance highlights the reality. It is impossible to completely stigmatize and the capital routes around the stigma and all capital controls, unless the entire world is under a single totalitarian regime.
All while only the edges, moving between physical cash and electronic system, and moving cash between borders and the electronic system, are policed, in what could really only be the ultimate hubris of expecting the state to be involved at all.
And it's not just cash. Its assets too. The state is hoping for titled and electronic settlement of assets. In the last 30 years a systematic global dismantling of explicit "bearer assets" has been done, when the bearer assets were offered by the state. But this is also unsuccessful, as since the 2010s, the bearer assets created and settled without a financial intermediary have existed and been wildly popular.
All capital controls have been obsoleted while they were never fully implemented to begin with. No matter whether that's the idea of your neighbor holding a lot of physical cash, or a subject of the Communist Party in another country circumventing capital controls you consider oppressive.
This article covers the same points with a wildly contrived conclusion: To attempt to change anything in favor of the state being more effective at enforcing its invented crime of money laundering instead of curbing the actual illicit behaviors. For reasons that are assumed and unexplained, so it's impossible for me to change my view on. My view is simple - capital controls are dead and a waste of time. The article and both books it references actually agree on that. My other view is that the state should just do classic investigative work on illegal behaviors which means finding the people involved and subpoena-ing them, something it seems to have forgotten how to do in favor of relying on deputized intermediaries who are temporary, ineffective, and inconvenience just the law abiding.
Most people want government to be able to seize assets of baddies. It is possible with cash, it is possible with banks, hardly possible with crypto.
The technology to scam people at scale with untraceable emoney is not everybody's cup of tea.
Speaking from a country that invaded its neighbor, for our government (as well as north korea) it is lovely to have a way around sanctions. Libertarian crypto bros of the west are a godsend.
They are also a godsend to current American president which loves a nice side of washed crypto along with all the other theft.
It is absolutely possible to like cash and dislike crypto
I dont, not while they get to decide who the baddies are.
Ukraine event's is prime example why finanical privacy is important. I think we're solving taxing issue from wrong angle, we should be look this another angle: Merchants should be identifiable and taxable while customer stay private. GNU's solution "Talor" is very interesting and promising.
Also if you're talking about Russia, people are switching back to cash en masse because cashless transfer between people is essentially half-criminalized. You run the risk of getting all your bank accounts blocked instantly on mere suspicion or for things outside of your control, with almost no real rules, accountability, or practical ways to push back. It's the way to avoid the runaway government process in the first place.
I don't know about stigma, per se, but there are a few places where businesses have a pretty explicit legal right to refuse cash, UK, Netherlands, Sweden, US. Oddly in PRC refusing cash is illegal.
capital, as an aggregate expression of people's desires, moves like water. if will flow through any small opening
capital controls will flow through any weak link, whether that's a Shanghai free trade zone, a freeport at the airport in JFK or Zurich, physical cash, illiquid assets traded through a trust, or natively in crypto, or crypto wrapped within the same aforementioned structures, no matter what the prevailing or commoner's view is everywhere else in the region
even countries that can change on the whims of an all powerful head of state, they don't really mess with the capital because it drives everyone else away and reduces the head of state's own liquidity and economic driver.
Disable Javascript and CSS
For example
There are also Firefox add-ons that can do this as wellOr use a text-only browser
One can use these to insert a Content-Security-Policy, either via HTTP header or <meta> tag, that disables Javascript and CSS
Personally, I use a local forward proxy to insert HTTP response headers, not a browser add-on, for experimentation and learning
As a matter of practice, I read HTML with a customised text-only browser that does not auto-load resources, nor does it interpret Javascript or CSS. There is no DNS prefetching or other nonsense. As such, a "Content Security Policy" is not necessary
People need to learn about Bitcoin.
Indeed. Bitcoin is now a major player in the money laundering business. NFTs are so much better than fake pocelain!
I'm sorry, that's not how it works.