> There's a reason private money was outlawed in the 1900s.
And the reason is probably a bit more nuanced than this sentence projects. Furthermore, reasoning in the 1900s should not be used to justify government monopoly on money in 2019.
Fair. I guess the 2008 financial crisis is an elephant in the room, for instance, revealing flaws in our current economic approach. But that is a very different conversation, I think, for a very different audience.
Sometimes, being in the cryptocurrency industry, it feels like a shouting match between people who have never studied economics or distributed systems or cryptography.
Your mistake is in thinking that the money laundering is achieved by, say, generating a credit card charge for FOO when the item sold was BAR. Not so - the money laundering is in opening many merchant accounts purporting to be for selling FOO, generating profit sanitized as "clean," moving those profits between banks, and essentially deceiving payment processors to generate a profit.
This was, in fact, one of the actual mechanisms brought to bear against Backpage. Certainly the indictment was motivated by, you know, underage sex trafficking, but the enforcement mechanism used to achieve a verdict was mostly money laundering. You can read the indictment yourself: https://www.justice.gov/file/1050276/download. How many counts of trafficking vs money laundering do you see?
And finally, no, they are not "selling different content through other processors." These processors' entire business model is to create "legitimate," totally unrelated transactions to the credit card authorities, to take a cut, and pass back the funds to the merchant. I believe Backpage was instructing people trying to purchase ad inventory to go to a portal to purchase dog food for a while.
No, this is not what Backpage was prosecuted for. If you look at the indictment in your link, the money laundering counts for Backpage were:
Counts 53-62, Concealment Money Laundering
"conduct ... a financial transaction which in fact involved the proceeds of ... unlawful activity knowing that the transaction was designed ... to conceal and disguise the nature ... of the specified unlawful activity"
Counts 63-68, International Promotional Money Laundering
"transported ... funds .. with the intent to promote the carrying on of ... unlawful activity"
Counts 69-93, Transactional Money Laundering
"engage in a monetary transaction in criminally derived property"
The point is that all of these require an underlying unlawful activity. Prostitution is illegal, and therefore it is also criminal to handle money in a way that hides that it's related to prostitution. But selling porn is legal, so the chain payments would not violate the same laws.
My point is the issue is not as black and white as you are making it out to be (hence, don't be an alarmist). All things are subject to interpretation and your position attempts to definitively categorize this activity as fraudulent behavior based on a 1000 word essay by a developer.
I work on money laundering cases. What the poster admitted to doing, particularly in the comments section, reads like money laundering. I have used emails more vague than this write-up against defendants in money laundering cases. The underlying crime would be bank fraud, wire fraud, or mail fraud, or all three, depending on how a particular merchant account was opened, how transactions were processed, and who the parties to a contract are (if a financial institution, then bank fraud, and so on).
You created your account 3 hours ago, with a creative name and then annonymously post you work on money laundering cases ... As if that is supposed to add credit or show some sort of background. You are anonymous, don't try and take some high ground to reinforce an invalid argument.
It's more complex than that. Sometimes people create throwaway accounts so they can share more information than they'd otherwise be able to, and really are experts or insiders on a topic. It's not always easy to tell such cases apart from fabricators or trolls, but it's important to try, and to give people the benefit of the doubt. I generally go by how substantive the comments are or seem (admittedly not an infallible test).
Fair criticism regarding anonymity. You can disregard my comments if that is an issue, but I would prefer to engage on this topic on equal footing and put aside any claimed background, if that works for you. Can you explain what it is that you think is invalid regarding money laundering with fraud as the underlying crime? Or, if another point I made was invalid, what that was?
> essentially deceiving payment processors to generate a profit.
That's not an illegal act, unless you can cite relevant statutes being broken. It's a contract breach.
Your whole analogy to Backpage breaks down without the initial illegal action that produces the revenue stream and sets in motion the need to launder the money.
You are being silly - breach of contract to deceive payment processors IS wire fraud and bank fraud, which are specific named federal crimes which cover exactly this use case. If you like, here's an excerpt from the Backpage indictment:
"the People now allege that Defendants conspired to orchestrate a bank fraud by misrepresenting to credit payment processors that they were not processing transactions from Backpage, and this misrepresentation would trigger a release of funds from banks. The overt acts alleged clarify that Defendants created multiple classified websites, and when applying for (at least one) merchant account, Defendant Ferrer omitted any reference to Backpage, despite intending to process Backpage transactions through the account. The People allege that credit payment processors, along with American Express, would not have knowingly processed the payments for Backpage and the banks would not have released funds absent Defendants’ trickery."
I think you should carefully read your quote - it includes the word "Backpage" four times, as in the illegal source of funds that created the laundry opportunity. Breach of contract with payment processors is certainly NOT wire fraud by itself, that's an absurd statement.
You're weirdly stuck on this "breach of contract superseding federal crimes" thing but uh, I don't know what to tell you. This scheme is clearly wire fraud. Defrauding a payment processor out of money, over wires, is wire fraud. It's also bank fraud when you lie to your bank about what your merchant account is for, which is another prerequisite for these schemes usually.
I would just be aware that any interaction with the financial system can quickly become criminal. Whether it does depends on a whole range of factors, but the option is always there. (Incidentally, the same goes for insurance companies. Can go criminal at any time.)
I wouldn't say that money needs to be "illegally obtained" to be classified as laundered. There are tax benefits to "laundering" legally obtained money, for example.
Although at this point we're just arguing semantics.
It has to be transferred AND
(1)illegally obtained, or
(2)intended for an illegal purpose, or
(3)disguised and international but not in any way illegal.
I know this will get down votes (but I'm generally a sarcastic guy so please take this in that spirit): if half are biased and half are morons what camp do you fall in? :)
You don't have to be part of the crypto-zoo. You can just stand on the side observing and shaking your head.
Disclaimer: I personally don't gamble/speculate and therefore don't have any crypto currencies in my possession. (this argument is usually used by IOTA fanboys to discredit critics of their currency/ICO)
Standing on the side lines, indirectly referring to participants as animals (crypto-zoo), shaking your head from your percieved superior position, generalizing participation as gambling / speculating demonstrates you are squarely in the biased 50% camp.
My Disclaimer: I have positions in several crypto projects (not IOTA specifically b/c I don't like some of the decisions they've made). I make no predictions as to which (if any) cryto projects will succeed but ultimately I think that the long term outlook is positive for a few.
Great comment, thank you. I love the idea of education as a differentiating factor, so my question would be, "from a customer's perspective, does the educational material have to be original content or would it be better to reference 'non biased / not affiliated' material?
It could be a combination of both, but I would suggest developing some original content along with reference to independent references perhaps. In my view, taking the time to develop original content sends the message that the company/fund cares, and is not recycling external material. Plus, you control the quality of the material. Retail investors, especially, are bombarded with infomercial fluff that has no value. Good quality material can only make you more credible.
Agreed, that growth hacking was the wrong terminology, I think I was being to aggressive with the description.
Yes, an RRSP is not a fund and like you said, a vehicle to hold an investment position. I was not trying to insinuate that an RRSP was a fund and I will edit my previous comment.
I don't want to get in a debate about what a hedge fund is, but while the term "Hedging" is the practice of reducing risk, the goal of most hedge funds is to maximize ROI. The term hedge fund comes from the historical tendency of the first "hedge funds" to hedge against the downside risk of the market by shorting the market (as where mutual funds can not usually take a short positions). In today's terms, hedge funds employee many different investment strategies so it isn't accurate to say hedge funds just hedge risk. Hedge fund managers usually make speculative investments and can sometimes carry more risk.
The funds is bench marked to Credit Suisee HF Index, Citibank Prime +5%, S&P 500. It is beating the bench mark since inception and that historical statement is verified by our auditors. Your point regarding "attracting huge amounts of capital" holds true when a fund reaches a certain size, typically greater than $120M, getting to that point is where a lot of the work happens. The point from start to autonomous growth must be managed with extreme care and diligence, it is imperative that a growing fund manages their growth to not try and grow faster than their operations can support. -- Which is what I'm asking HN, I am soliciting opinions and experiences from smart people, maybe growth hack is the wrong term.
I agree that as a fund grows it definitely gets harder to scale, and at this time, we haven't begun to scale at our full potential, so that point remains in the central view of the risk committee.
so in the parent thread, i've learned more about hedge funds than i knew before, and i certainly formed a favorable opinion of the fund discussed here. So i'll reiterate a prior post's suggestion regarding education. Beyond ignorance though, there's a clear bias that perhaps you ought to target. the HN community seems to me, to be very clever, fiscally conservative, and highly skeptical. I'm certainly the latter two.
Also, i suspect that a large fraction (easily double digit is my guess) of HN readers are accredited investors. Despite these attributes, knowledge you take for granted might be lacking. In my case, i lack a basic fluency in what a hedge fund is as well as a knowledge of a few simple rules to distinguish legitimate ones from those that (likely) aren't.
Without this knowledge, what i know about hedge funds is what i read on HN and that is usually unfavorable (setting this thread aside). So for instance, i recall reading that Ellen Pao's husband is a manager of hedge funds of sufficient reputation to attract more than $100 million from municipal pension funds, but is now bankrupt and declared a ponzi scheme by the bankruptcy judge.
Again, not to disparage hedge funds, rather just to emphasize that these are exotic instruments that very few have any idea how they work, and so there's nothing to mitigate the highly negative association caused by the alarmingly frequent instances of massive fraud orchestrated with hedge funds.
clearly it's not logical--everyone knows what a "hedge" is and they know what a "fund" is, but put those two words together and they metastasize into an term with a strongly reinforced negative connotation.
> I don't want to get in a debate about what a hedge fund is, but while the term "Hedging" is the practice of reducing risk, the goal of most hedge funds is to maximize ROI.
So you're not a hedge fund.
>The funds is bench marked to Credit Suisee HF Index, Citibank Prime +5%, S&P 500.
I'm no hedge fund expert, especially ones based out of Canada, but I think it's based on the fee structure. Hedge funds typically get 2% AUM and 20% of the return. I don't see any reason to think that isn't the case.
Those funds make sense to me for a real estate focused hedge fund that is primarily used in retirement accounts.
The fund is a RRSP eligible investment in Canada (I think the equivalent of 401K in USA?). We are not currently serving the American market, sorry, I should have mentioned that but I think the growth management would be similar in both markets.
And the reason is probably a bit more nuanced than this sentence projects. Furthermore, reasoning in the 1900s should not be used to justify government monopoly on money in 2019.