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Felix Salmon Profile picture
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Feb 17 • 8 tweets • 2 min read
I think people have misunderstood something important about blockchain and money laundering in the wake of the Dutch/Razzlekhan arrests. Which is that it was mostly normal TradFi AML that made it hard for them to launder their BTC, rather than inherent blockchain transparency.
They could *own* BTC no problem. They could create new wallets and transfer the BTC from wallet to wallet no problem. They could even tumble the BTC and get new BTC that weren't easily traceable back to the original heist. They just couldn't convert that BTC to USD.
Their problem was pretty much the same as the problem of someone with $100 million in cash who wants to be able to spend normally, out of a bank account, with some kind of plastic card. That's hard! If the cash is ill-gotten. You can't just deposit it at your local Chase.
Dutch/Razzlekhan were approaching regulated financial institutions saying "can we open an account and put lots of BTC in it" and the institutions said "sure, where's it from" and they couldn't answer credibly. THAT was their problem. Just like it would be with USD cash.
Crypto regulation is centered on "on-ramps and off-ramps" and it was the off-ramps that tripped up these guys. That's because global regulators have done a pretty good job of regulating crypto exchanges, not because crypto is inherently transparent.
Are NFTs good for money laundering? This one's more interesting. If you buy an NFT for $ and then sell it for $$$$$$ to a wallet that pays with tumbled BTC, that *might* be a way of passing a very cursory AML check?
It's risky, though, and the thing about money laundering is you only need to get caught once. If you have lots of ill-gotten money, you want one place to launder it that you trust. Trying out a bunch of laundering techniques to see what works... won't work.
of course @TheStalwart doesn't need a whole thread, he can just troll a single twete. But yeah, this.

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More from @felixsalmon

Felix Salmon Profile picture
Jan 7
It's time for another 🧵about promoted tweets from @MasterworksIO.
You might recall we've talked about these things in the past, when the company was using made-up returns on actual paintings to promote its product.
Now Masterworks is taking a new tack, which is to use other people's marks and likeness without their permission.
Read 12 tweets
Felix Salmon Profile picture
Jan 5
I would HIGHLY recommend that @mfriedenberg and @aagalloni take a significant minority investment in the new @Justin_B_Smith @benyt venture, and give them free desk space in Reuters bureaus around the world, for reasons I glossed here, in 2018. vox.com/2018/3/16/1712…
@mfriedenberg @aagalloni @Justin_B_Smith @benyt The value exchange could be enormous on both sides. The Smiths need a plan for what they're going to do when they're sued in any one of dozens of jurisdictions; Reuters can be very helpful there.
Meanwhile, Reuters needs to be able to have a compelling consumer-facing product by the time the Refinitiv money runs out in 2048. They can't count on building it internally; they've tried and failed many times. The Smiths' product could be exactly what they're looking for.
Read 5 tweets
Felix Salmon Profile picture
Oct 28, 2021
I have this theory that professionals can only communicate in 2 directions, which is why it’s very rare to see union leaders in the press. A short 🧵…
CEOs communicate down, to their employees, and also out, to the world. They’re generally the main spokesperson for the company.
Individual experts within the company are sometimes asked to talk about their area of expertise, while also communicating up to their managers. Out and up is ok.
Read 5 tweets
Felix Salmon Profile picture
Oct 21, 2021
Trying to work out what this could be. “A successful enforcement action, as well as two related actions, by a U.S. federal regulator and a foreign regulator.” In the amount of about $1b-$2b. cftc.gov/PressRoom/Pres…
I mean, if the CFTC is going to put out blind-item press releases, of course we’re all going to start guessing
But I’m having difficulty thinking of anything recent and CFTC-adjacent that reached $1 billion or more
Read 4 tweets
Felix Salmon Profile picture
Jun 10, 2021
I have a story out this morning about the staggering amount of unemployment fraud that has happened over the past year — as much as $400b. A quick 🧵:
axios.com/pandemic-unemp…
First, yes, this data comes from security companies with skin in the game — ID.me and LexisNexis. Also, crime statistics are always fuzzy. There's nothing here that's precise. On the other hand, government sources aren't disputing these numbers.
The big picture is that unemployment fraud has become systematized. It's sold on a SAAS basis on the dark web, and it's operated by very sophisticated international syndicates in Russia, China, Nigeria, and increasingly Romania.
Read 8 tweets
Felix Salmon Profile picture
May 1, 2021
I’m genuinely interested: Who is the man on the left, and what does the $2.1m number refer to?

Ed Ruscha’s “Hurting the Word Radio #2” was bought directly from the artist in the early 70s by Joan & Jack Quinn, for much less than $2.1m; they sold it for $52m. Image
cc @MasterworksIO who might be able to shed some light on this
Ok so mystery solved on who the man is, he’s a stock-photo model istockphoto.com/photo/ambition…
Read 6 tweets

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