1994-04-18 - Re: Laundering money through commodity futures

Header Data

From: “Perry E. Metzger” <perry@snark.imsi.com>
To: gnu@toad.com
Message Hash: 46fd4a0fe07d4fcff1a40254bf8d9e471f33bdc4c585449ddf8853ab0f0fa347
Message ID: <9404181111.AA03079@snark.imsi.com>
Reply To: <9404160625.AA00695@toad.com>
UTC Datetime: 1994-04-18 11:14:02 UTC
Raw Date: Mon, 18 Apr 94 04:14:02 PDT

Raw message

From: "Perry E. Metzger" <perry@snark.imsi.com>
Date: Mon, 18 Apr 94 04:14:02 PDT
To: gnu@toad.com
Subject: Re: Laundering money through commodity futures
In-Reply-To: <9404160625.AA00695@toad.com>
Message-ID: <9404181111.AA03079@snark.imsi.com>
MIME-Version: 1.0
Content-Type: text/plain

gnu@toad.com says:
> I wonder if anonymous digital cash will really consist of shares in
> frozen orange juice futures...
[quotes article from Risks]

The article in Risks was largely bullshit. In the real world, you
can't predict futures prices well enough to do what he proposed. The
person who wrote it has obviously heard rumors but never got enough
details and never figured it out on his own. He's obviously never
actually thought about the real problem -- in practice you can never
predict which ticket will win -- if you could you'd become a
billionare in the futures markets.

The way people tend to do this sort of thing in reality is that they
find a friendly broker who'll write a pair of tickets and then switch
them if necessary. In practice, this is traceable if anyone

This used to be a trick often practiced to move money into a
tax-deferred retirement account -- one would write two tickets, and
take the loss against one's personal account and the gain against
one's personal pension fund. This scheme was also used to defer
capital gains near a year end by creating an offsetting loss -- write
two tickets, sell the loser (so you can claim the loss) and then wait
to sell the winner for a few weeks until the New Year has come. The
IRS finally caught on and people stopped doing it. Coincidently, this
sort of scheme was at its height in the late '70s -- precisely the
time it was used by Tyson to bribe Hillary Clinton.