We can turn this to a semantic argument over the meaning of "practical usefulness", but in my opinion collecting such information provides no additional benefit to Coinbase other than keeping regulators at bay and avoiding future fines and restrictions.
> why might 'regulations' be in place such that when large sums of money change hands
I have done some work in the financial compliance space. You would be surprised how small some of these "large sums" are and they keep getting smaller even while inflation weakens the value of the currency involved. In some locations, the limit is as low as ~$1000 USD.
Yes the motivation is anti-terrorism, protect the children, national security etc... but in practice it is just a vehicle for governments to collect data on its people. In this case, good actors will behave the same while their data is collected and shared. Bad actors who are aware of these restrictions can just pay the $0.25 to transfer through a newly created wallet and then send without these restrictions while regulators pat themselves on the back for stopping money laundering.
What can end up happening with policies like this? Well if governments, regulators, or monopolies get out of hand all of a sudden you cannot send money to a political party. Maybe all your bank accounts are frozen for supporting a protest or all of a sudden you have no way to purchase a flight to leave. Maybe Mastercard/Visa ban donations to entities like Wikileaks for "moral reasons" while allowing donations to the KKK and other similar organizations. These changes don't typically happen all at once. Freedoms are salami sliced away at a rate that doesn't upset the majority and the norm slowly moves to believe that these restrictions are for our own good. (sorry I went a bit off topic here)
Also, why was "regulations" in quotes? Sorry if I missed something or misinterpreted your tone here. Hopefully I answered your question.
> It's not 'semantics', it's the opposite of 'semantics'.
Is there an opposite of "semantics"? Isn't semantics just the topic around the meaning of words and communication? Is the opposite just everything else?
Anyways the point was that Coinbase is likely acting not because it extends the "practical usefulness" of their products, i.e. it adds no new features or functionality. They are likely acting out of regulatory necessity.
The semantic argument is whether regulatory necessity falls under "practical usefulness". I'd argue no, as the usefulness of their product as it applies to users either doesn't change or actually goes down as a result of this, but one can similarly argue that not satisfying regulators likely results in the loss of the product altogether.
> It's not mostly 'terrorism and protect the children' - it's tax evasion, wire fraud, bribery, insider trading, financial fraud, scams etc.
Can you elaborate on this a bit? Collecting beneficiary data is useful for things like redundant checks against sanction lists such as OFAC (terrorism, organized crime, and human trafficking falls under here). I don't see how tax evasion, insider trading, and bribery even apply here.
- Tax evasion would likely deal with the exchange reporting both trades and received funds for a user, neither of which applies to beneficiary data on outgoing funds afaik
- How is insider trading relevant here? Would that not be dependent on trading and not the transferring of assets. Does providing beneficiary data do anything to shed light on trading with privileged data?
- Bribery? Maybe, but seeing as this still happens fairly regularly with traditional finance, I doubt that this will curb much behavior.
> We mostly derive our protections from 'government overreach' via the constitution, not anonymity.
I assume you are talking about the US constitution which doesn't much apply to non-US persons. The US Constitution doesn't provide much context or protection around the financial system either.
In Section 8 we have
> "Congress shall have Power [...] to coin Money, regulate the Value thereof, and of foreign Coin."
And in Section 10,
> "no state [...] shall make any Thing but gold and silver Coin a Tender in Payment of Debts."
> why might 'regulations' be in place such that when large sums of money change hands
I have done some work in the financial compliance space. You would be surprised how small some of these "large sums" are and they keep getting smaller even while inflation weakens the value of the currency involved. In some locations, the limit is as low as ~$1000 USD.
Yes the motivation is anti-terrorism, protect the children, national security etc... but in practice it is just a vehicle for governments to collect data on its people. In this case, good actors will behave the same while their data is collected and shared. Bad actors who are aware of these restrictions can just pay the $0.25 to transfer through a newly created wallet and then send without these restrictions while regulators pat themselves on the back for stopping money laundering.
What can end up happening with policies like this? Well if governments, regulators, or monopolies get out of hand all of a sudden you cannot send money to a political party. Maybe all your bank accounts are frozen for supporting a protest or all of a sudden you have no way to purchase a flight to leave. Maybe Mastercard/Visa ban donations to entities like Wikileaks for "moral reasons" while allowing donations to the KKK and other similar organizations. These changes don't typically happen all at once. Freedoms are salami sliced away at a rate that doesn't upset the majority and the norm slowly moves to believe that these restrictions are for our own good. (sorry I went a bit off topic here)
Also, why was "regulations" in quotes? Sorry if I missed something or misinterpreted your tone here. Hopefully I answered your question.