Cryptocurrency Turns to Cash in Russian Banks (2024)
48 comments
·January 22, 2025evilsaloon
cwiz
They started to appear after Finnish localbitcoins.com went out of business, most are vendors from there.
blibble
are there any uses for crypto other that sanctions busting and drug dealing?
oh and pump and dump scams
__MatrixMan__
Crypto is for when you have an enemy that is powerful enough tamper with your communications. It's useful in those circumstances, e.g. Chinese journalists posted covid coverage on Ethereum to prevent the CCP from removing it. In the case described in the article, Russia is using it to keep their economy running despite western sanctions.
You're not going to find a good use case for it which does not include an adversary as part of the story. But that doesn't mean it's just for criminals. Or maybe it does because this is the sort of adversary that writes laws, but sometimes the criminals are the good guys.
For instance, if I wanted to set up a shadow government so that we had something to fall back on when we all stop paying our taxes in protest of the awful things our government is using that money for, it would involve a protcol where amending its constitution means getting the right set of cryptographic signatures together to publish an additional block on the chain that defined the constitution. Locking this sort of thing into a protocol prevents the kind of interference that we saw on Jan 6 2021 because if certification of change is distributed there's nowhere to attack.
piltdownman
Affords a traceable and immutable prevention to corrupt financial institutions like HSBC further funding the Cartels via laundering of the petro-dollar
https://www.reuters.com/article/business/hsbc-became-bank-to...
FabHK
Yes, HSBC laundered money for Mexican drug cartels. Surprise: the business of handling money flows attracts criminals. That's why it is heavily regulated.
When the HSBC money laundering was revealed, what was TradFi's answer? Let's stop it, and crack down on it further.
What is the crypto answer? Oh, rules are still occasionally broken, so let's just scrap all the rules and launder all the money we can (and break sanctions, and so on).
diggan
> What is the crypto answer? Oh, rules are still occasionally broken, so let's just scrap all the rules and launder all the money we can (and break sanctions, and so on).
I feel like you're (hopefully) talking about a specific case here where some exchange was exposed as actively ignoring activity they knew to be illegal. Could you share what story you're talking about here?
notavalleyman
Your link says that the bank had lax controls in 2008 which allowed bad actors to move money through HSBC.
Your link did not say anything about crypto, it didnt imply that HSBC was corrupt, it didn't indicate the cartels were funded by HSBC. All of those additional points were added by your conspiracy imagination
ASalazarMX
> the bank had lax controls in 2008 which allowed bad actors to move money through HSBC
Oh no! If only HSBC had the power to implement tighter controls that wouldn't allow it to receive boatloads of money. Oh well, it's not like they know a lot about money laundering, tax evasion, or handling large sums of money generally.
P.D. other comment mentioned that money flow attracts criminals, and I interpret it as criminals working on HSBC, not cartels using their services.
parineum
The HSBC-Cartel laundering thing was a huge deal. It was much more than "lax controls". Op's link might not have the details but you can read more about it here, it's actually pretty nuts.
https://www.investopedia.com/stock-analysis/2013/investing-n...
>One memorable detail U.S. law enforcement noted was that Mexican drug cartel members employed boxes customized to fit the dimensions of an HSBC Mexico teller window for their daily cash deposits.
spacemanspiff01
I guess more generally money laundering.
diggan
Cryptocurrency just by itself cannot do "money laundering", you need something that looks/works legally within your jurisdiction that you can slowly "wash" the money through. No matter what, the tax man will find you unless you pay taxes somehow on the money you use openly.
nyc_data_geek1
Guess what happens when fascist regimes target those they deem undesireables? Often, they confiscate their property.
Many cryptocurrencies are inalienable, so long as you preserve private access to your seed phrase.
Also, how about when your local currency undergoes hyperinflation? Would non-sovereign currency with global consensus based value be of potential use then?
dartos
> Often, they confiscate their property.
In the real world, you need to exit crypto to realize the value of your holdings.
That’s the weak link in the anti-regulation argument. You can’t pay for food or housing in most places with crypto.
> Also, how about when your local currency undergoes hyperinflation? Would non-sovereign currency with global consensus based value be of potential use then?
How would crypto be immune to this? Most of the extreme large holders of crypto (financial institutions) are also exposed to fiat risk and would likely liquidate their crypto assets in order to keep staff paid and buy the dips in fiat.
nyc_data_geek1
Yes, you can exit your crypto when you are deported from your local fascist regime.
Crypto is immune to this because it's not tied to the value of one sovereign currency, or any particular polity or another.
I am not talking about the utility of cryptocurrency to large financial institutions. I am talking about the utility to individuals as their nations gradually become insolvent and austerity fails to placate the robber barons, ultimately leading to currency collapse.
Look at the localbitcoins volume data for Argentina, for instance.
_aavaa_
> Many cryptocurrencies are inalienable, so long as you preserve private access to your seed phrase.
Your local fascist regime has a very simple and low tech answer: https://xkcd.com/538/
nyc_data_geek1
Deportations are a thing, and ethnic cleansing is not a new idea. It's not always so easy to know what people hold in those situations.
Still, fair point. All the more reason to care about privacy.
galleywest200
I pay for my VPN with it to be semi-anonymous. But my VPN provider also accepts cash so that is always an alternative option.
Thats....about it.
dartos
The use is and always has been an extremely unregulated marketplace to exchange value. (Whatever value means is up to the buyer)
I think the entire idea behind cryptocurrencies from the beginning was to have unregulatable currency.
That comes with good and bad, but for most people in most situations it’s not as useful as regular currency.
FabHK
Indeed. From Satoshi's emails:
++++++++++++
>> You will not find a solution to political problems in cryptography.
> Yes, but we can win a major battle in the arms race and gain a new territory of freedom for several years.
> Governments are good at cutting off the heads of a centrally controlled networks like Napster, but pure P2P networks like Gnutella and Tor seem to be holding their own.
> Satoshi
++++++++++++
> It's very attractive to the libertarian viewpoint if we can explain it properly. I'm better with code than with words though.
> Satoshi Nakamoto
redmattred
Remittances without fees
kspacewalk2
There are typically plenty of fees associated with converting real money to crypto, then back to real money in another country. I think the real draw for (semi-)legitimate use is for transfers in/out of countries that have unwanted surveillance and/or currency controls.
throwaway74354
Ransomware
kspacewalk2
Original title is "How Cryptocurrency Turns to Cash in Russian Banks".
diggan
HN titler strikes again, it automatically removes a bunch of words like "How". If submitters just take a look at their submission after hitting "Submit", they'd notice the issue and add it back. But oh well
wil421
> The analysis also showed nearly all 56 exchanges used services from Cloudflare, a global content delivery network based in San Francisco.
r29vzg2
Interesting conversations happening in the comment sections on that site.
fermigier
Who could have guessed?
null
As someone who lived in Russia for a while, I have personal experience with these mini-exchanges. They're the Internet equivalent of those currency exchange stands at airports, I wouldn't call them full crypto exchanges like Binance.
They're a pretty interesting phenomenon. Some do KYC, some don't. Some are fully automatic and just need to be "topped up" occasionally, some are fully manual. They usually provide an easy on/offramp to/from crypto, but they usually have high fees and minimum transaction requirements on top of an unfavorable exchange rate. Sites like bestchange exist to aggregate all the different rates and slice a cut from the affiliate revenue.
It's nice to see how they work (or don't) from the legal side. In my mind they've always existed in a grey legal area, since some mini-exchanges openly proclaim their registration in e.g. the UK and some just don't say where they're headquartered.
They do work, but they've always felt a bit shady, and I've felt anxious using their services. Centralized exchanges are way better in regards to support and have a better exchange rate to boot.