From: cman@communities.com (Douglas Barnes)
Date: Wed, 11 Oct 95 17:11:06 PDT
To: cypherpunks@toad.com
Subject: Re: Banque des Cypherpunks
Message-ID: <v02120d03aca218e0cb4b@[199.2.22.120]>
MIME-Version: 1.0
Content-Type: text/plain


>aba@atlas.ex.ac.uk writes:
>>Technologically it would be possible to have multiple ombudsmen, or
>>even have the recovery key be secret share split amongst ecash users
>>in such a way that some chosen percentage of agreement would be
>>required before cash could be traced, or revoked (made worthless).
>

I need to make the legal situation plainer:

This is an all or nothing situation. Dirty money is dirty money.
If the host government(s) decide that your institution was willfully
blind to the transmission of dirty money, they can seize substitute
assets. I'm not saying _should_, I'm not saying that there aren't
fairer ways, but any and all assets in "cooperating" countries _will_
become fair game if the government decides you've let your institution
be used for money laundering.

This property may be transitive -- if another institution knows or should
have known that your institution knows or should have known that the
money was dirty, _they_ may find their assets in cooperating countries
seized. Furthermore, as I mentioned in Part the Second, countries are
blatantly paid off for cooperating. In fact, Munroe mentioned after his
talk that the Swiss are among the very quickest to freeze assets, although
they are very slow to unfreeze them....

I'm not saying there aren't clever ways around this -- it's an arms
race, and one that bankers, regulators and LEAs perceive themselves to
be losing. Nevertheless, I don't think that anyone, regardless of their
intentions, should get involved in international money transmission
unless they are fully aware of the tools and techniques that may be
brought to bear against them.