progress

[Declan McCullagh]

At 04:53 PM 1/5/2004, Steve Schear wrote:
>Initially there would likely be a surge in use by their competitors, like 
>Pecunix, that operate entirely outside the US.  Later new entrants would 
>probably spring up.

Undoubtably, over a period of years, you're right.

But then you have the next wave of attacks by the U.S. regulatory apparatus 
(again, assuming sufficient determination). The U.S. could pressure the 
Panama government to close Pecunix or apply direct or indirect sanctions 
and incentives. The U.S. could make it more difficult for U.S. residents to 
transfer money into a Pecunix account, perhaps through direct criminal 
sanctions or regulatory discouragement. The U.S. could mount a propaganda 
campaign against trusting Pecunix and similar operators, and so on.

The last point might even be a valid one. Without external validation or 
sufficient reputation, who will trust the operators of an offshore bank not 
to flee with the money once they're received enough cash to make the value 
of the gold outweigh the possibility of prison time? I see Pecunix has a 
gold certificate (http://pecunix.info/gold_bars.htm) posted but I do not 
know anything about the Anglo Far-East Bullion Company, whether they are 
trustworthy or in cahoots, or what contract governs Pecunix executives' 
access to the gold apparently in the valut.

I have no reason to doubt Pecunix's honesty and they seem to have taken 
some measures to respond to the obvious criticisms. I suppose my point is 
that I'm optimistic in the long term but pessimistic about such services 
becoming widely opted in the short term because of the reaction by the 
U.S., the OECD's FATF, and so on. In this specific case of physical drug 
shipments, there's always interdiction at the physical border too.

-Declan