This is exactly why I am horrified by the number of bitcoin companies cropping up. I can only assume many of them have no idea what they are potentially exposing themselves to from a legal perspective.
I'm not entirely convinced that money laundering is unethical in its own right. Certainly, profiting from unethical activity is only once removed from unethical. That would make obfuscating the taint on unethical-once-removed funds an act that is unethical-twice-removed.
Clearly, there has to be some point at which we can no longer care, because I'm not certain that (metaphorically) there is a coin circulating that hasn't been dipped in blood at least once. Otherwise, the farmer who sells a hog to the butcher that sells sliced ham to the mafia capo's wife also shares the taint.
And even that presumes that the money to be laundered is profit from an unethical act, rather than one merely prohibited by government edict. I personally do not find marijuana-based commerce to be unethical. Therefore, I don't particularly feel as though a seller of sinsemilla on Silk Road should feel bad about wanting to be able to spend his profits without getting pinched, even if it means a murderer-for-hire could theoretically also prevent someone from following his money.
It isn't the money that's dirty or clean. It's the person holding it. Thus, I believe the criminalization of money laundering practices is simply an effort by the governments to solidify their control over the financial sectors, and to make their efforts at fighting crime less labor-intensive.
Even if all money were perfectly untraceable, police could still solve crimes by examining the evidence of the crime, rather than the evidence that someone got paid for it.
Of course, states seem to think that is rather a useful tool to have, so I expect that this business will be raided and shut down sooner or later. My advice is to cash out (in actual cash, no less) on the unexpected success as soon as possible, and then exit the business entirely before someone decides to make an example of it.
Ethically, there's a difference between profiting incidentally from criminal activity because a fraction of your customers happen to be criminals, and having a business model which is viable largely due to criminal activity.
That difference being directly attributable to the criminal activity. If your business model is killing people and taking their wallets, you are unethical because you murder and steal, not because you have more money in your pocket after you do it.
There was an idea floated a while back about why 51% of the miners couldn't just disavow the Bitcoin that FBI seized from Silk Road users. The answer was that it would completely unravel the currency, and impose an ethical obligation on everyone to examine the source of coins before accepting a transaction.
Gold has no smell. If it did, it would all stink. Attaching ethical considerations to money itself places an additional transaction burden in commerce, such that even a tiny cost can grind everything to a halt, in much the way that a pinch of sand in your oil pan can destroy your engine.
Think about the ethical consequences of currency that is not completely ethically neutral, and compare with the consequences of one that is. In the one case, money laundering happens, and you cannot reasonably prevent it. In the other, black markets flourish as white markets fail, because currency can flow only between them in only one direction.
I'd argue that running a business providing services which are attractive primarily to criminals, like anonymously converting one means of payment to another for a 50% margin, is unethical even though money transmission per se isn't. YMMV
Money laundering is an act of assisting someone in getting away with a crime. If you inadvertently do so, you're not guilty of money laundering. The intent has to be there.
Maybe that's the way you feel it should be, but it's not that way in the US. It's more a form of negligence. If you don't follow AML rules, you are negligent thus guilty.
Money laundering is not unethical. It wasn't even illegal in the US until 1986. At the time the law was passed we were promised it would only be used against organized crime that couldn't be stopped any other way.
Laws against anonymizing sources of income (Money laundering) are primarily enforced for tax evasion purposes. It's the catch all for even the most brilliant of enterprising "criminals".
Just because something is illegal doesn't mean it is wrong. There are a lot of sociopath control freaks that want to dictate morality to the world, or to have power and control over others. There are many "crimes" that one might participate in that are perfectly valid business transactions such as consumption of controlled substances and prostitution. Right and wrong transcend words written on paper. One might argue that enabling the freedom to participate in these markets safely is extremely ethical and those attempting to restrict these markets are the criminals.
I think you need to explain why money laundering is unethical. Because there are plenty of laws passed by various governments that many people feel would be unethical to follow.
To use an extreme example, was it unethical to hide jews from the Nazi's?
It can be more complex than that. An extreme pacifist could have no problem with taxes per se but feel that paying taxes today implicates him in war crimes (drones strikes, etc.)
Fuck off. So he used an extreme example, doesn't mean his point is invalid. Godwin's Law is not supposed to be used as an excuse to shut down uncomfortable conversations.
I'm guessing the intent is to say that anonymizing the source of money per se doesn't seem to do anyone any harm, much like accepting cash as a form of payment. The problem is when people use such channels to avoid detection of crimes by law enforcement. We have to decide as a society which conveniences or defenses of privacy (anonymizing the source of money being one) are worth sacrificing to enable better law enforcement.
Can you expand on this? Because the way I'm reading it it sounds like since it "could" be a tool for money laundering the OP shouldn't be doing it. But by that logic a car "could" be used to facilitate a bank robbery and therefore the salesman needs to consider those ethical ramifications.
There's a huge difference between this and a car salesman.
A car salesman goes through all sorts of paperwork and meets with the person they are selling the car too, and they hand the keys over.
This is much more similar to the service where you take a photo of a Key and you get mailed a copy of it for 5$; except it's semi-anonymous with bitcoin.
No, just that the paper trail generated by purchasing a car from a dealership is undesirable for a criminal. This is why conventional financial institutions and services are undesirable for most criminals.
The difference is that government regulators (in the US at least, but presumably in many other countries soon) have stated that they consider bitcoin exchanges to be money transmitters and therefore regulate them in ways that prevent money laundering (http://blogs.reuters.com/financial-regulatory-forum/2014/01/...).
I suspect most lawyers/regulators would consider changing bitcoin into gift cards is legally like transmitting to cash.
Cars are regulated also, for instance to post a license plate that can be used to identify the owner's name and address, in part because they can be used in crimes.
This isn't _just_ an issue of if the seller is being ethical; it's an issue of whether they're following the law.
It's all about due diligence. Selling gift cards for bitcoins isn't illegal. However, you need to be aware that it can be easily exploited for money laundering, and you need to take steps to prevent that. And don't think money laundering is something that just happens in the movies. It's a very real problem, and deserves being attended to.
As for your car example, I'll leave that to the other comments already rebutting it.
Just because someone can do something (technically and legally), it doesn't mean he should do it. I was trying to comment on the course of the discussion here -- there are a lot of comments about regulations and criminal liability but not many about ethical responsibility.
Clearly the most important issue is the factual one... whether there is more than incidental money laundering happening here.
If I had an ad placement business that only placed scammy ads or if I developed software that allowed people to be oppressed, I would also have issues. I would think that enabling criminal behavior is in the same broad category.
As far as cars, there's no issue selling a car. However, if your cars had armor plating and hidden compartment for guns, you have an ethical responsibility to find out if your customers are generally up to no good. If there is still a business to be made from legitimate customers, then maybe there's a way to ensure they're the only ones you do business with.
It's far more akin to a guy who sells guns out of his trunk in a dark alley. Chances are, it's being used for crime, even if there are legitimate uses for it.
One marked advantage to buying a gun for cash in a private sale is that the state won't know that you have it.
While I don't necessarily believe that would lead to acts of malice such as confiscation raids, it has already led to bonehead moves such as publishing over the public network the names and addresses of all registered gun owners in an area.
Also, people buy illegal moonshine when legit liquor stores are available. People buy cigarettes sold in the wrong state or from a tribal reservation. Buying a gun from an alley is a possible choice for someone who would otherwise prefer to bypass taxes, paperwork, and bureaucracy--illegal, of course, but not necessarily a prelude to a different crime.
Actually, it is not a crime in most US states. Person-to-person firearm sales are a wonderful example of a seller choosing to assess the intention of the buyer, and the moral ambiguity that this represents. A person can legally sell firearms out of his trunk in a great many places asking for nothing more than proof of age of the buyer.
This method of sale represents ~40% of all gun sales in the US. It would be safe to assume that the majority of guns purchased with the intention to commit crime are purchased person-to-person. There's a good breakdown of nationwide person-to-person regulations here[1].
> No, because selling guns out of your trunk is a crime more often than not.
So is operating an unlicensed money transmission business -- in the US, this is likely to be both a state and federal crime -- or a licensed money transmission business without adhering to appropriate anti-money-laundering controls.
For most of them it's no problem, they're just selling their product or service in an additional way.
However, something like this is scary as it's basically one hit easy money laundering. Not a bad idea if you're running the service anonymously. You'll make a good profit for sure. Otherwise there could be substantial risks and it may be better off to shut it down before feds get involved.
I think the issue here is that you could use a stolen card to buy Starbucks cards and sell them to this guy for btc. This guy is then going to swallow the loss when the fraud is detected. Credit card thief gets away with bitcoin.
