Many of the basic aspects of the alt-coin world, accepted by many to be the future of digital currency, are in fact based in criminality. Dr. Craig Wright explores how pervasive this rot is in his latest article, “MSBs and Account-Based Systems.”
He begins exploring the basic natures of several cryptocurrencies and concepts, and breaking down how, even if their proponents don’t want to admit it, the law applies to them as they meet the definition of a money service business (MSB.) He writes:
“Monero and mixed coins (such as those using Schnorr) are engaged in the activity of money transfers and money handling… Every node and every software wallet engaged in mixing would need to fulfil the obligations that apply to a money transmitter…Peer-to-peer exchange is covered under the anti-money laundering (AML) rules.
“A money transmitter is any person engaged in the transfer of funds — any funds, including cryptocurrencies and bitcoin. If you are running a Lightning node, you are acting as a money transmitter. It doesn’t matter that you don’t like it. The law doesn’t care.”
This uncomfortable truth is something many in the industry don’t want to fess up to, as it would destroy their business models and wreck their prospects of bringing in money from more uninformed but idealistic investors. He adds, “The problem with the so-called “experts” is that they have no expertise. They seek to create a narrative and change reality such that it aligns with their beliefs, and believe that doing so will make them experts.”
The ideology they cater is the libertarian, anarchistic view that money should be divorced from government. Currencies like Monero specifically offer anonymity to attract this audience, and then end up being the tools of criminals. This is a dead-end trap, he notes:
“The error people make is that they think a cryptocurrency is inherently valuable because it can get around law. It cannot. The unfortunate aspect here for many investors is that they will wake up one day and find their holdings worth nothing.”
Bitcoin wasn’t made to be a method to escape the government’s reach, but as a method to keep all parties accountable via the blockchain. “I created Bitcoin to trump the anarchist ideas of money that could not be controlled and that acted outside of all regulatory controls,” he writes. “I created Bitcoin as an immutable evidence trail that is pseudonymous and cannot be made legitimately anonymous and continue to work.”
Those who praise the supposed anonymous features of cryptocurrencies, and doubt the government’s that want to crack down on them, notably John McAfee, are trying to create a system of lawlessness. That’s simply not a system in which a society can continue to build, or in which legitimate businesses can invest in.
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