I don’t think anything was truly debunked here. Debanking is indeed a side-effect of AML laws and regulators, but as the article highlights, these laws are largely ineffective at stopping actual money launderers. Meanwhile, the vast majority of debanked customers are innocent. AML laws should be repealed entirely. Law enforcement should do their job and investigate crimes, rather than outsourcing this responsibility to financial institutions and effectively forcing them to be the "judge, jury, and executioner."
> these laws are largely ineffective at stopping actual money launderers.
Let's think about what the purpose of money laundering laws is. Nobody really cares about people concealing the source of their income in the general case. There's no purpose for money laundering laws just for that purpose alone.
The reason that money laundering laws exist is that one way to discover and prosecute crimes that people actually care about (human trafficking, drug dealing, various kinds of fraud, terrorism) is to "follow the money", and if criminals can successfully launder their money, it makes it easier to get away with their criminal activity.
The second reason that it exists is that money laundering _itself_ is often a much easier crime to prosecute than the underlying offense is. What KYC and AML laws do, and are extremely successful at is _not_ preventing money laundering. That would actually be undesirable for prosecutors! What KYC and AML laws do is allow people to money launder while creating a wonderful paper trail for prosecutors to follow and build a case on when they take an interest in someone from crimes they actually do care about. Chances are if you are money laundering, you have at some point lied on a banking form, which is a prosecutable crime, and a lot easier to prosecute than drug dealing and other crimes are, sometimes.
> these laws are largely ineffective at stopping actual money launderers
Money laundering could be the "think about the children" relying cry of the financial world. If international entities want better control over financial exchanges and a window into people's money, playing the money laundering card is a guarantee to get it passed without having to justify it that much.
The degree to which it has affected regular/everyday banking is pretty astounding, and is probably exactly what the regulators wanted from the start.
> Money laundering could be the "think about the children"
My hyper-liberatrianism is showing, but I've always been slightly irritated with money "laundering" being a crime in the first place. It's pretty far removed from the actual harm: money laundering is illegal because drugs are illegal and drugs are illegal because when people do drugs they do things that actually cause harm (to others and themselves). Like... I get the cause-and-effect chain there, but there's no evidence that these laws help anyway and they definitely hurt.
The reasoning is very simple: You want criminals (no matter what crime) not to be able to enjoy the fruits of their "labour". That strikes me as eminently reasonable.
I didn't read the article but I do agree with you completely. I've noticed this repeatedly where if I've to move a small sum of money in/out of my country I need to fill 20 letters and 50 if it's a business. But if I have to move say $100MM? Banks will roll out a red carpet, no questions asked.
If it's left to the banks they are all too happy to serve anyone with money, we have quite a few examples[1] of that. Regulators want banks make examples of anyone which banks do by harassing small businesses which won't have monetary impact to banks' bottomline. My gut feeling is even regulators don't care much, they just want to pretend to the voters that they are trying to do something, anything.
> if I have to move say $100MM? Banks will roll out a red carpet, no questions asked
What are you basing this on? Every nine-figure wire I've seen issued was far more involved to get authorised than anything sub-million. (For obvious fucking reasons.)
From personal experience trying to open a crypto related bank account, one of the most important requirements was to deposit a substantial amount of money in the account.
>Law enforcement should do their job and investigate crimes, rather than outsourcing this responsibility to financial institutions and effectively forcing them to be the "judge, jury, and executioner."
Think there have being big pressure from banks and financial institutions to centralize power. AML laws seems just a way for the regulators to do it.
Banks and financial institutions see AML as a necessary cost center to continue operating as a business. They would gladly fire 90% of their compliance department if they didn't have to write hourly memos to FinCEN and join conference calls with the Fed. Power and money correlate, but money is ultimately what does the talking.
