Irish banks, Bitcoin and Anti money laundering rules

L

Leo

Moderator
Messages
16,235
TheBigShort said:
My understanding of bitcoin is that it stands outside of the 'regulated' financial system and uses the blockchain technology to provide trustless transactions - i.e it doesn't need regulation.
Click to expand...

Yep, where the issues arise is in transferring money into or attempting to take it out of Bitcoin. Those transactions need to comply with whatever anti-money laundering legislation is in place in the local market, and that's causing some problems now. Also, US regulations cover the operation and management of crypto exchanges as evidenced in the Silk Road take down. So while money already in Bitcoin can move regulation free, putting it in, or getting it out is facing increasing hurdles.
 
Leo said:
So while money already in Bitcoin can move regulation free, putting it in, or getting it out is facing increasing hurdles.
Click to expand...

I cant imagine the hurdles to be too arduous? I mean, we are living in the free world arent we? I use Coinbase, which to my understanding, is fully compliant with US regulations. I also use Ulsterbank, so any funds withdrawn to, or from, Coinbase to UB are wholly traceable.

The drama continues....price is tanking. If it goes below €3,000 I can start sweating, below €2,000, panic. :eek:
 
TheBigShort said:
I cant imagine the hurdles to be too arduous? I mean, we are living in the free world arent we? I use Coinbase, which to my understanding, is fully compliant with US regulations. I also use Ulsterbank, so any funds withdrawn to, or from, Coinbase to UB are wholly traceable.
Click to expand...

The challenge is with the audit trail to that point. Likely won't be a challenge for all, but for anyone who obtains bitcoin through trading activities, proving the source is legit and not on any of the blacklisted organisations or nation states will be a challenge.
 
Looks to have bounced a little for now, so while the immediate panic might be over for now it'd be interesting to see if anyone dealing with the Irish banks is facing any problems.
 
Leo said:
The challenge is with the audit trail to that point. Likely won't be a challenge for all, but for anyone who obtains bitcoin through trading activities, proving the source is legit and not on any of the blacklisted organisations or nation states will be a challenge.
Click to expand...

I still not convinced. The whole concept is that it based on open source ledger that is viewable to all.
If I sell 1kg of cocaine* for €5,000 cash and another 1kg for 1BTC, what is the difference if I deposit the cash and the proceeds of the sale of BTC?

*I have no idea what the price of cocaine is, in case anyone is wondering.
 
TheBigShort said:
I still not convinced. The whole concept is that it based on open source ledger that is viewable to all.
If I sell 1kg of cocaine* for €5,000 cash and another 1kg for 1BTC, what is the difference if I deposit the cash and the proceeds of the sale of BTC?
Click to expand...

In either case, if the transaction amounts exceed anti-money laundering triggers, you have to satisfy the authorities that the money came from a legitinate, non-black-listed source. In the case of cashing out of Bitcoin, while the ledger is open, how does a bank satisfy their requirements in terms of the identies of the individuals behind the transactions?
 
Leo said:
In either case, if the transaction amounts exceed anti-money laundering triggers, you have to satisfy the authorities that the money came from a legitinate, non-black-listed source. In the case of cashing out of Bitcoin, while the ledger is open, how does a bank satisfy their requirements in terms of the identies of the individuals behind the transactions?
Click to expand...

Not really, BTC is not an illegal asset. If I sell a car for €20,000 cash and 1BTC for €20,000 on coinbase and deposit both sums in a bank I simply show proof of both transactions.
The fact that the €20,000 cash proceeds for the car or 1BTC were illicitly got, or not, by the buyer, shouldnt be of concern for me.
 
TheBigShort said:
Not really, BTC is not an illegal asset. If I sell a car for €20,000 cash and 1BTC for €20,000 on coinbase and deposit both sums in a bank I simply show proof of both transactions.
The fact that the €20,000 cash proceeds for the car or 1BTC were illicitly got, or not, by the buyer, shouldnt be of concern for me.
Click to expand...

I'm not suggesting Bitcoin is illegal, and I called out it'll most likely only affect people who are cashing out bitcoin they obtained through trading (i.e., not investing, holding, selling at a profit via the same platform), but anti-money laundering requirements have become a lot more stringent in recent years. If you sell your car for €20k and lodge it in your local bank, they have an obligation to satisfy themselves that your story is accurate and the source of the cash isn't illicit. You can read the requirements applying to Irish entities here.

In many jurisdictions financial institutions then have additional requirements to ensure they are not in any way dealing with companies or individuals associated with blacklisted countries, companies, orgainisations or individuals (Cuba, Syria, Iran, North Korean, etc. in the US for example).
 
Leo said:
If you sell your car for €20k and lodge it in your local bank, they have an obligation to satisfy themselves that your story is accurate and the source of the cash isn't illicit. You can read the requirements applying to Irish entities here.
Click to expand...

I know. They can check who the vehicle is registered too, the make, model, mileage etc if they want. Then assess if €20,000 is fair and reasonable etc.
Ditto bitcoin. They can see when and how much funds left my UB account to Coinbase.
They can see how and when funds transferred from coinbase to UB. They can calculate any capital gains and make an assessment.
I really dont see what the issue is?
 
TheBigShort said:
I know. They can check who the vehicle is registered too, the make, model, mileage etc if they want. Then assess if €20,000 is fair and reasonable etc.
Ditto bitcoin. They can see when and how much funds left my UB account to Coinbase.
They can see how and when funds transferred from coinbase to UB. They can calculate any capital gains and make an assessment.
I really dont see what the issue is?
Click to expand...
Yes but some of your gains may be the result of money laundering which you have no control over or approve off,
 
RETIRED2017 said:
It is possible to check the real value of the E20000 car ,
Click to expand...

???

If I walk into a bank with €20k in cash they will probably want to know the source of it. If I deposit €20K from coinbase, they already know its source.
Large amounts of cash is more likely to raise alerts than the proceeds of selling crypto from Coinbase as those proceeds will be recorded electronically.
 
RETIRED2017 said:
Yes but some of your gains may be the result of money laundering which you have no control over or approve off,
Click to expand...

But isn't that risk the same in the "real world" ?

A night in a casino somewhere in Ireland could find one of us in the exact same situatiton.

Ultimately, if criminals want to defraud you then they will find a way, and so on.... it's the game of cat and mouse that has gone on for hundreds, if not thousands, of years.
 
TheBigShort said:
They can see how and when funds transferred from coinbase to UB. They can calculate any capital gains and make an assessment.
I really dont see what the issue is?
Click to expand...

Seriously? I've said twice now that it applies to those who obtain bitcoin through trading, not buying to speculate.

Leo said:
I called out it'll most likely only affect people who are cashing out bitcoin they obtained through trading (i.e., not investing, holding, selling at a profit via the same platform)
Click to expand...
 
Leo said:
Seriously? I've said twice now that it applies to those who obtain bitcoin through trading, not buying to speculate.
Click to expand...

Excuse my ignorance, but I just dont get the issue? You mentioned "people who are cashing out", how do people "cash out" of bitcoin?
 
MrEarl said:
But isn't that risk the same in the "real world" ?

A night in a casino somewhere in Ireland could find one of us in the exact same situatiton.

Ultimately, if criminals want to defraud you then they will find a way, and so on.... it's the game of cat and mouse that has gone on for hundreds, if not thousands, of years.
Click to expand...
I agree just hope the criminals have not came across a very 'rich seam'
 
Last edited:
Leo said:
You convert your bitcoin into a conventional currency. Via Coinbase as an .
Click to expand...

Yes, I have already highlighted coinbase. What odds? Coinbase is, to the best of my knowledge, compliant with all regulatory requirements in the US.
Why is depositing cash proceeds into coinbase an issue, as opposed to say an Irish bank?
 
TheBigShort said:
Yes, I have already highlighted coinbase. What odds? Coinbase is, to the best of my knowledge, compliant with all regulatory requirements in the US.
Why is depositing cash proceeds into coinbase an issue, as opposed to say an Irish bank?
Click to expand...
I see There are reports EU is set to create new regulations any thoughts on the subject,
 
You must log in or register to reply here.
Back
Top