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Romney Shakedown Attempt Shows Bitcoin's Laundering Potential

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Comments (10)
Blackmail is ugly. Theft is criminal. It would be a shame, though, if this stunt were used as a pretext to try to stamp out anonymous digital transactions. The eventual elimination of paper bills and coins, and all their costs and inefficiencies, is desirable and likely. But an all-seeing monetary surveillance state is a terrifying and avoidable prospect.
Posted by Marc Hochstein, Executive Editor, American Banker | Thursday, September 06 2012 at 11:32AM ET
The hoax is not really about money laundering, which wouldn't even enter into the picture if blackmail was legalized.

Aside from the purported break-in, blackmail in and of itself is a victimless crime as Prof. Walter Block has pointed out in this 1999 paper, http://www.walterblock.com/wp-content/uploads/publications/block_blackmail-as-a-victimless-crime-1999.pdf
Posted by Jon Matonis, The Monetary Future | Thursday, September 06 2012 at 11:41AM ET
Remember Mondex? DigiCash? and other anonymous eCash programs? All had substantial controls to monitor large transactions and to protect against fraud or misuse. Anonymous can be used properly if the providers establish rules to guard against misuse. eCash is for small transactions, not million dollar items.

Mike Nash retired eCash advocate
Posted by mnash900 | Thursday, September 06 2012 at 12:33PM ET
Mike, Thank you for commenting. Bitcoin's decentralized nature may make such controls impossible. Is that always a bad thing, necessarily? Humor me: I'll play devil's advocate on the transaction size limits you alluded to. Might there be innocent reasons for someone to want to move even large amounts of money under the radar? Imagine a member of a minority ethnic and religious group facing persecution, or a political dissident, who plans to escape his home country and wants to put his wealth somewhere it won't be confiscated by the government he's fleeing. Swiss bank privacy, as I understand, is not what it used to be....
Posted by Marc Hochstein, Executive Editor, American Banker | Thursday, September 06 2012 at 1:13PM ET
It's not really fair to call SatoshiDICE a "mixing/laundering system." It's a casino game. The fact that it can mix coins during this process is no different than a grocery store which combines cash deposits from various customers. You wouldn't call a grocery store a "laundering system" even though it could be used for such.
Posted by sean.orchard | Thursday, September 06 2012 at 3:24PM ET
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