Phil Karn writes:
Recall that the US has money-laundering laws that require you to file a form every time you move $10,000 or more in or out of the country. If the First Digital Bank of Cyberspace is offshore, it could come under these laws, at least with respect to priming your account with real money.
It's an interesting question whether they could then get you for sending more than $10,000 of digital cash across the border without filing the form. It's even more interesting if you encrypt all these cross-border transactions...
This could tie a lawyer up in fits, because even if you sent digital cash across the border, you could still produce a _spendable_ copy in the originating country! In fact, you could have the same 'bill' residing on media in a dozen countries! You couldn't legally spend more than one copy of the digital cash, of course, but digital cash (unlike hard cash) can be located in several places -- and probably would be if you're talking about a substantial amount of money.
Another wonderful set of laws we can credit to the "war on drugs".
Many countries restrict or monitor the flow of currency across their border; this isn't simply a result of the WoD. However, the WoD was the main reason publicly acknowledged. Bear Giles
From: bear@eagle.fsl.noaa.gov (Bear Giles)
Phil Karn writes:
Recall that the US has money-laundering laws that require you to file a form every time you move $10,000 or more in or out of the country. [...]
It's an interesting question whether they could then get you for sending more than $10,000 of digital cash across the border without filing the form. It's even more interesting if you encrypt all these cross-border transactions...
This could tie a lawyer up in fits, because even if you sent digital cash across the border, you could still produce a _spendable_ copy in the originating country! In fact, you could have the same 'bill' residing on media in a dozen countries!
Not only that, but a digital cash certificate, unlike regular cash, can be cut up into little segments that each have no value other than being random numbers. You send one segment to each of various accounts arond the world and then reconnect the segments at some site located in a country with weak banking regulations... An idea I had for this digital cash stuff that might be a little easier is to consider some of the nations within the borders of the U.S. The various Native American tribes have a degree of semi-sovereignty that may allow them to get away with something like this. This would make things easier for using this system in the U.S. because it would be fairly trivial to get the reservations on to the net if they are not already. The advantage for those running such a cyberbank is that they would get connected, and get machines to do this stuff, and the rest of us would effectively be paying them to do so :) [it probably would not be a hard sell, but the question is whether or not the various tribes have enough sovereignty to get away with it.] It is things like this that probably give regulators fits. IMHO, the real reason governments are opposed to strong cryptography is that in an information society it effectively places the population outside the control of the government, the central government becomes superfluous. jim
participants (2)
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bear＠eagle.fsl.noaa.gov -
Jim McCoy