Here's an anecdotal thought: AML laws surprisingly work well to discourage offline transactions by tax-paying citizens, helping maximize tax reporting and improve tax collection. As a result, governments continue to strengthen and expand laws in that direction.
It used to be super common for many small businesses to be cash only or a 10% discount for cash. Likely the main driver for this was tax avoidance. I haven't seen a cash only business since covid.
With a dwindling number of legitimate cash users, any business that is pulling in huge sums of cash well beyond the average is going to look increasingly suspicious.
Collectibles (e.g. trading cards) are still a "cash is king" market. Some dealer only take cash, virtually all of them prefer it, and offer steep "discounts" (lack of markup) for cash.
> Likely the main driver for this was tax avoidance.
It's not just that, though. It's common here in France for credit card operators to have fees in the 5-10% range (or 0.30€ per operation + 2% of the amount). That's why you often see signs « card accepted above 10€ », and that's why your local shop will probably not mind if you're missing 10 cents when paying cash.
> It's common here in France for credit card operators to have fees in the 5-10% range (or 0.30€ per operation + 2% of the amount)
Interchange in the EU is capped at 0.4% for credit cards. Typical costs for processing are much lower than 5-10%.
For example, Adyen charges the 0.4% interchange + their fee of 0.6% and a flat 0.11€. On a 10€ transaction, that's 2.1%.
In most cases this is cheaper than handling cash. When you accept cash, you have to pay somebody to close and reconcile the drawer, take the cash to the bank (or have a security company do it for you), account for shrinkage / mistakes...it's a bit of a myth that cash is cheaper for businesses to handle, especially in places like the EU where card interchange rates are highly regulated.
Now of course, if your cash is not going the usual routes and isn't getting accounted for in the books...that equation can change.
Had a conversation with the landlord of my local pub a few years back, he said he'd go "Card Only" if it wasn't for the handful of patrons that refuse to use card, couple of which are the "Cash is King" Facebook types.
And he was paying his staff under the table in cash anyway! But would still rather just withdraw from the business account, rather than having to deal with handling of customer cash every day.
> With a dwindling number of legitimate cash users
Services for laundering cash are going to see a huge uptick in turnover.
You put the cash in the local slot machine, the slot machine owner then purchases legitimate services from your wife / cousin / other family member’s business.
Or you rent a hole in the wall location massage business that that maybe legitimately employs one or two people but on the books they manage to see back to back clients for 20 hours a day.
Another good one is hair dresser / barber, they often take cash.
My barber loves talking about “creative tax tricks” he does as an all cash joint. More interesting was how he managed to purchase a home despite having very little reported income. It involved friends in the “legitimate” cannabis industry in California, but he got it done.
I’m not sure the stress is worth (presumably) 20% or so savings for his income.
its not just his income. everybody in the cash economy wins. if I take cash and pay my employees in cash, that's a few transactions the tax man misses out on.
quite a bit of labor runs on cash. you can usually get a deal for a lot of services by paying in cash. sometimes the floor manager will take cash and never even report the transaction to the business much less the tax man (I rent forklifts and get plating work done this way).
I've seen barbers before Covid not accepting cash, after Covid happy to accept cash. The Covid rules for subsidies were very strict, sometimes having to repay all as they didn't fully comply. Cash gives protection against bankruptcy due to unfortunate rules.
Still lots of builders/tradies in the UK who do "for cash".
Also lots of takeaways, they'll be on JustEat/Uber Eats and cash-only in store which is a PITA. My local chippy is cash only and no-delivery. I can't find a single record for a recorded business, or health rating either!
I've mainly seen it in small businesses - e.g. food vendors - but instead they charge extra for using electronic payment methods. Also to offset the costs they're making on offering it I suspect, but it does encourage people to pay with cash.
>> and card company rules are not quite as threatening as actual laws
Well, they are plenty threatening in the sense that if you don't follow them, they will refuse doing business with you, which suddenly means you can't accept cards at all, which can kill a business entirely.
> As a result, governments continue to strengthen and expand laws in that direction.
Which creates national security and sovereignty issues. Cash is robust and decentralised. There is a good reason Sweden went from pushing cashless to advising people to keep cash at home for emergencies, and were at least considering an obligation to accept cash for small transactions.
That's just a disaster planning POV. If you've ever been in a shop where the EPOS goes down, you'll know how chaotic it is. And that's just a macro scale.
> Which creates national security and sovereignty issues
Are you talking about people who don't pay tax? They create very large national security and sovereignty issues. Countries that don't collect much tax have real problems with both of these.
> There is a good reason Sweden went from pushing cashless to advising people to keep cash at home for emergencies
As a consumer, I like paying with cash. It's more convenient for me to think about the amount I have on me than to maintain a mental inventory of bank/card balances all the time. That's my business, not anyone else's.
> Countries that don't collect much tax have real problems with both of these.
Nothing like as bad as the potential problem of your economy grinding to a halt.
There are other ways to deal with tax evasion. Those countries usually do not have good systems. If you investigate properly, design tax laws properly, chuck a few people in jail, etc. the problem can be solved.
Not using does not close loopholes, or prevent corruption, or stop people sending money offshore.....
> The key phrase being "for emergencies".
If you go cashless you will not have the infrastructure to use cash in an emergency.
I learned a lot about the AML system many years ago and still have some books about how it works on my bookshelf. It's fascinating stuff.
A few minor comments.
My wife and I have owned and used 1000 CHF notes quite a few times in the past. The last two times we moved apartments I paid part of the moving fee with a 1000 CHF note. We've also bought furniture this way. Nobody was surprised to see this and the notes were accepted without question or comment. To a person who spent their life in Britain this sounds absurd because the British government has - true to form - been trying to wipe cash out for many years to improve surveillance. You can't get any high value notes there, they just don't exist, because the state assumes that anything it can't see must automatically be suspicious. And there's so much street crime, and the police care so little about burglary, it would be very dangerous to hold such notes. But in Switzerland it's safe and the government doesn't try to wipe cash out, so paying with high value notes is common. (Although bank notes are in no way as private as people assume and can be tracked quite well, because they don't tend to circulate far.) This situation makes a mockery of the recommendation to fight crime by removing high value bank notes. The UK did this already and ML is out of control there: criminals just don't care.
I looked into the case of George Cottrell once. The case against Cottrell collapsed because it was founded on entrapment (the eight months was a plea deal in the usual American fashion, and doesn't mean much). It boiled down to undercover FBI agents asking Cottrell, "how could we launder money" and he explained how to do it, in the way anyone familiar with the topic could. He didn't make any offers to actually do it, didn't do it, and that's why "could be jailed for up to 20 years" turned into an eight month plea bargain to let prosecutors save face. Then after he was released he trolled US LE by writing a book called "How to launder money". Usually not given is the subtitle: "A guide for law enforcement and politicians". It's not written for criminals but people love to omit that detail.
Carousel fraud in the EU is a huge problem that governments hate to talk about because they don't know how to fix it and fear that by talking about it, they'll just teach more people how to do it. It's an infinite money glitch but in the real world. It's interesting that the UK thinks they solved it. I suspect they didn't, rather, enforcement collapsed elsewhere and it became easier to just go back to other ways of scamming the government.
> The UK did this already and ML is out of control there: criminals just don't care.
From 18th May:
“A new £30m High Street organised crime unit has been announced by the government after the BBC's year-long investigative reporting into illegal mini-marts, vape shops and barbers.”
> You can't get any high value notes there, they just don't exist
Yes, although this is mostly by capping the highest regularly circulating note at £50 after the war and then waiting for inflation.
> And there's so much street crime,
[mostly false]
> and the police care so little about burglary,
Sadly true (including "find my iPhone" reports; there was a joke during the Mandelson scandal that this was the one time the Met had managed to locate a phone)
> The UK did this already and ML is out of control there: criminals just don't care.
Yes, which makes a sort of orthogonal point about whether or not cash is actually important for this. There's the conspicuously suspicious businesses ("American sweet shops"), but also more complicated stuff going on (Scottish Limited Partnerships were in the news). Then there's all the Crown dependencies, which are a total financial wild west still.
> Carousel fraud in the EU is a huge problem that governments hate to talk about because they don't know how to fix it
God yes. This is a significant problem in VAT as a concept; I don't understand why the EU loves VAT so much.
I'll give you one better. I know someone who had their nearly new Range Rover stolen in Manchester - reported to the police etc. Few days later, they found it parked at a car park near a big supermarket. Rang the police, they said well, if you still have the keys...just take it? And he was like hang on, you don't want to look at it, check for drugs, take fingerprints, you know, do any actual police stuff stuff around stolen property? And they were like nope, don't have the time or the people to come out, if you have the keys just take the car back and make sure you tell your insurer you got it, that's all we can do.
I'm not suprised that in the swiss economy no one bats an eye at 1000 CHF bank notes. After all the swiss are historically known for being the classy alternative to launder and store your ill gotten gains from, for example, your stint as the dictator of an African country.
But there has been some changes in recent years so I don't know how it is today.
The absolute peak of that was, of course, during WW2 when vast amounts of stolen or looted money, gold, and other valuables ended up being laundered through Switzerland and kept in anonymous accounts. Mostly by Nazis, although not exclusively. There was a long campaign of litigation by the descendants of Holocaust victims to get some of it back.
In the 21st century the US eventually pressured them into not being a tax haven for anonymous money hidden by US nationals.
The twin questions of tax and terrorism remain as pressure against money laundering.
>To a person who spent their life in Britain this sounds absurd because the British government has - true to form - been trying to wipe cash out for many years to improve surveillance.
Oh come of Facebook for christ sake. Absolute hogwash.
My business needs to insure cash that we keep at the shop in case we get robbed, but that amount is much much less than we pay in credit card fees. In other words, we would much prefer customers to pay with debit or cash.
In Italy there is a very aggressive law against money laundering: if you withdraw more than 1k cash, it triggers a call to the police.
I know it's the same if you do it over multiple days.
I think it has been relaxed a little bit later on, but in Italy everybody does the "I'll charge you X less without VAT" (which is 23% in Italy, I should point out), so this is also fighting that.
Presumably the police computer system is told about the transfers automatically and it has no capacity problems. I know my own country has long had such a system and these days is almost entirely cashless.
That wouldn't help in the situations described in the article. For example where individuals buy drugs with small amounts of cash, then that cash is used to buy things like luxury watches and iphones, then those items are taken overseas and sold.
Seemingly the only effective way to solve this would be to ban purchasing highly resellable items with cash and requiring that cash to be deposited in to the system first.
You cannot have a transaction in cash of that size. Loundring is about converting the dirty cash back to normal money, but the idea is to force you to go through a bank
Does that mean it's illegal, or that they'll just come knocking to investigate?
I wonder if the "it's my money, I can withdraw it if I want" argument is good enough to send them on their way? (in addition to $1,000 being such a small amount as to be less-than-trivial when it comes to the overall problem of money laundering).
I think the limit is 10k and withdrawals over 1k get bundled.
If you hit the limit you get reported to the Unità di Informazione Finanziaria (Financial intelligence unit) and what they do is under their discretion.
You mean they implemented laws under the guise of "money laundering".
They just want to track what you spend your money on, that's step one.
Step two is to restrict what you can spend your money on, although this is a partial side effect of part 1.
You're onto something, but from some Romanian local investigations and public statements into similar cluster of laws [0], it's just something banks lobby for, so they can have more control and consolidate their place in any transaction chain. Maybe govt benefits a little, but when you see limited cash withdraws or commercial transactions requiring a bank system, it's usually private gains at play.
Actually the privacy legislation in Italy is pretty strong. With the gdpr, banks have more challenges to do what they do with data in the US.
Government might be tracking everybody, the goal of the law for sure is that.
> Step two is to restrict what you can spend your money on
Where do people get these ideas? How do they sincerely hold them?
No non-religious government wants to restrict what you can spend your money on. They want to get a cut of your money, but otherwise it's strictly better for them if you spend as much of it as possible.
If they don't want you to have things, they just attack those things directly, like hard drugs or weapons. No need to restrict your ability to purchase.
Let's ignore the fact that that was done by private companies and not directly by a government.
The mechanism is to make it so undesirable objects are not available for sale. The above comment is implying these things would remain legitimately for sale as normal, but you would be unable to spend money on them.
Aside: The author of this article wrote a fantastic novel that not a lot of people know about called “The Debt to Pleasure”. One of the best instances of the “unreliable narrator” I’ve ever read.
Good to know, thanks! This article was such a breath of fresh air compared to the usual "LLM-assisted" writing you get.
Just sentences like this:
> This isn’t just a problem for far-off countries of which we know little, like the EU and the US and China. Here in the UK [...]
So good! I feel like I'm becoming an old cynic but if it's the tenth time on the day that I read an overdramatized "It's not X, it is Y" in an article, actually good writing just hits different.
Not a fan of AI writing but I find sentences like that to be fluff and would prefer a more concise article overall. That would also have been my critique prior to AI and is the reason I only made it about half way through.
Phenomenal author indeed. "Capital", a novel about the financial crisis and bankers on the hedonic treadmill, is wonderful too. Too bad either Lanchester or his publisher has beef with Amazon, most of his work is not available as an ebook.
" Bullough gives the example of a Mexican drug dealer who smuggles product across the border to the US. The drug in question would once have been marijuana, then cocaine, and is now likely to be fentanyl, which is cheap to manufacture and easy to conceal. The drugs are sold in the US for cash, which is used to buy, say, agricultural equipment. "
Wouldn't the person buying the tractor in the US for $$$ have to show where that money came from? Can you show up to John Deere with over a million dollars _in cash_?
The short answer is yes. You can buy cars, trucks and tractors for cash. The more expensive the car, the easier it often is. Luxury cars in particular are routinely bought and sold for cash.
Not in the US without the dealer doing all the same work a bank accepting $100k of cash in a duffel bag would be doing. Plus filling out a suspicious activity report on top of it all. They might have a real hard time explaining to the feds that they truly did "know their customer" from a simple form and a photocopy of your ID.
Some dealers might be willing to do this for you, but most will not. They will direct you to your local bank to deposit the money and get a cashiers check instead. They do not want the liability of it all. Perhaps better chances at the Ferrari dealer you've bought 14 cars from over the past 30 years I suppose?
I asked my (luxury) dealer if I could pay cash the last time I bought a car and they basically said “hell no, we haven’t done that in over a decade”. The risk of being caught up in some drug money investigation or whatnot is too great.
Coincidentally showing up to your bank with a duffel bag worth of cash to deposit is a great way to both get your accounts closed, as well as be added to a blacklist so it will be very difficult to open an account anywhere else.
Citation needed? Where did you hear that this is a routine occurrence? That seems risky for everybody involved, and it requires a report to the government from the seller.
I don't know about the US. The EU limit on cash transactions differs by country, with a legal maximum of 10k€. Belgium and the Netherlands for example are at 3k€.
POSWID* says that money laundering laws are intended mostly to keep the proles and other people within the system honest, while providing a clean and easy system for people with enough money or cachet to bypass it.
I always thought the TV show Ozark was fairly accurate in it's depiction of money laundering. The family would buy a small business that they could inject cash and cook the books with fake sales.
any tips based job; serving/waiting, stripping, bartending, etc. gig/service work. freelancer websites that offer escrow, etc. Shopify. Hell, github sponsorships. You don't even need a physical store these days, or a business for that matter. Cashapp even. The list is endless and it's easier than ever.
Now I just need some dirty money to go through the hassle of cleaning
> Governments don’t do anything about the status quo, for a number of reasons: it inconveniences them to look too deeply into the darker corners of their own financial systems, and they make money from printing their own currencies and don’t much care how that cash is used. But most of all, they don’t do anything about it because they haven’t got a clue.
The last one couldn't be farther from the truth, and the first one couldn't be farther from a lie.
> I reckon the luxury watch trade is 80 per cent money laundering
Found this quote interesting given Europes richest person is the head of a luxury brand company.
I always wonder who was buying all this high end stuff - the concentration of wealth has created a more billionaires - but they aren't that many of them and there is only so many watches one person needs.
It also may explain why China is struggling to establish it's own luxury brands - the money laundering prefers that cross border flow.
It's very simple, there is more incentive for money laundering than there is fighting it. It's the same reason there are more lawyers working for large companies vs small guys. The invisible hand that determines the structure of our society.
Seems like the reason Australia dragged its heels on AML changes for property purchases. Propping the property market up was more important than stopping crime.
The state's ability to track and criminalize people based on financial behaviors through deputized financial intermediaries is new, and temporary.
Outside of this social graph, where private cash transactions still exist, the state lacks power and relies on stigmatizing cash ownership, consumption, movement. This stigma is largely successful and ubiquitous but inconsequential to anybody that matters or has a lawyer of their own.
Electronic settlement of funds since the 1970s has allowed for the state to leverage financial institutions for records and enforcement. Electronic settlement without institutions since the 2010s removes that power from the government and is merely a reversion to the mean. Any delay in the prevalence of this is both user-error, social stigma, and a government's unfamiliarity with the reality that their own constitutions and documents that organize the state are things that have to be updated to actually remove an expectation of privacy from finance.
> We don’t know what successful money launderers are doing in the present moment. All we do know is what unsuccessful ones have been caught doing in the past.
One major and necessary fallacy inside the social graph is that electronic settlement between institutions assumes that the deputized institutions have blessed the funds and user as not money laundered. Only the user and who they transact with can trigger an investigation by the government at this point, by reporting the money for taxes or in a large withdrawal to cash out of the social graph, without further laundering it. This user error is mostly mitigated as soon as cross border payments are done, because the next financial institution doubly assumes funds from another country's banks are clean. The banks and sovereignty become the washing machine inside the electronic settlement system.
This is doubly important to realize, because it's the tip of the iceberg in brand sovereignty. One country's illegality is not another country's illegality.
You can't simultaneously be for a stigma against withdrawing large amounts of cash, while considering the Communist Party's capital controls to be oppressive. Removing one capital control, blesses the other.
This is a blind spot for most people, since they don't consider them to be the same things, but fortunately this cognitive dissonance highlights the reality. It is impossible to completely stigmatize and the capital routes around the stigma and all capital controls, unless the entire world is under a single totalitarian regime.
All while only the edges, moving between physical cash and electronic system, and moving cash between borders and the electronic system, are policed, in what could really only be the ultimate hubris of expecting the state to be involved at all.
And it's not just cash. Its assets too. The state is hoping for titled and electronic settlement of assets. In the last 30 years a systematic global dismantling of explicit "bearer assets" has been done, when the bearer assets were offered by the state. But this is also unsuccessful, as since the 2010s, the bearer assets created and settled without a financial intermediary have existed and been wildly popular.
All capital controls have been obsoleted while they were never fully implemented to begin with. No matter whether that's the idea of your neighbor holding a lot of physical cash, or a subject of the Communist Party in another country circumventing capital controls you consider oppressive.
This article covers the same points with a wildly contrived conclusion: To attempt to change anything in favor of the state being more effective at enforcing its invented crime of money laundering instead of curbing the actual illicit behaviors. For reasons that are assumed and unexplained, so it's impossible for me to change my view on. My view is simple - capital controls are dead and a waste of time. The article and both books it references actually agree on that. My other view is that the state should just do classic investigative work on illegal behaviors which means finding the people involved and subpoena-ing them, something it seems to have forgotten how to do in favor of relying on deputized intermediaries who are temporary, ineffective, and inconvenience just the law abiding.
Where cash is stigmatized? I haven't seen such a place except PRC.
Most people want government to be able to seize assets of baddies. It is possible with cash, it is possible with banks, hardly possible with crypto.
The technology to scam people at scale with untraceable emoney is not everybody's cup of tea.
Speaking from a country that invaded its neighbor, for our government (as well as north korea) it is lovely to have a way around sanctions. Libertarian crypto bros of the west are a godsend.
They are also a godsend to current American president which loves a nice side of washed crypto along with all the other theft.
It is absolutely possible to like cash and dislike crypto
I don't understand what is meant by "hardly possible with crypto." I've been hearing that for a long time but I've also heard so many stories about theft of crypto assets and seizures by government. In the US that seems to have slowed to near nothing with the current administration but it doesn't seem to be a capability issue. Or maybe I misunderstand you or the situation?
This is correct attitude, for example some people actually got arresred for supporting ukraine efforts on war. I disagree that all my assets must be seized because i donated few bucks for sake protecting invaded country.
Ukraine event's is prime example why finanical privacy is important. I think we're solving taxing issue from wrong angle, we should be look this another angle: Merchants should be identifiable and taxable while customer stay private. GNU's solution "Talor" is very interesting and promising.
Everyone in China has to and will accept cash in practice (no idea about big transactions though). Cash is also more frequent among locals in remote places.
Also if you're talking about Russia, people are switching back to cash en masse because cashless transfer between people is essentially half-criminalized. You run the risk of getting all your bank accounts blocked instantly on mere suspicion or for things outside of your control, with almost no real rules, accountability, or practical ways to push back. It's the way to avoid the runaway government process in the first place.
>Where cash is stigmatized? I haven't seen such a place except PRC.
I don't know about stigma, per se, but there are a few places where businesses have a pretty explicit legal right to refuse cash, UK, Netherlands, Sweden, US. Oddly in PRC refusing cash is illegal.
Because "cash" isn't actually real, it's entirely a form of completion of a contract. The same contract that you could agree to complete by trading chickens, or bottles of bath water.
there is high consensus on that, but not high enough to enshrine it into the constitution. in countries with strong rule of law, the courts have continued to uphold this whenever the state gets bold enough to move on a previously tolerated "baddie"
capital, as an aggregate expression of people's desires, moves like water. if will flow through any small opening
capital controls will flow through any weak link, whether that's a Shanghai free trade zone, a freeport at the airport in JFK or Zurich, physical cash, illiquid assets traded through a trust, or natively in crypto, or crypto wrapped within the same aforementioned structures, no matter what the prevailing or commoner's view is everywhere else in the region
even countries that can change on the whims of an all powerful head of state, they don't really mess with the capital because it drives everyone else away and reduces the head of state's own liquidity and economic driver.
It's not so much invalidating Bitcoin - Bitcoin is valid and effective. Unfortunately what it is extremely effective for is money laundering and tax evasion (which was what your original comment seemed to advocate for.)
First off, money laundering does not require cash. So the premise is a bit strange.
Second, I submit that money laundering should not be considered a crime at all. Monitoring it (for example, banks required to report large cash transactions to the government) just leads to mass surveillance of innocent people.
Transferring money from A to B - why should that be a crime? The point of anti-money-laundering laws is that the money generated at point A may have been generated illegally. It isn't the money transfer that is the problem, it is the illegal activity. The police need to put in the effort to prosecute that illegal activity.
This is reminiscent of the continual pressure to break end-to-end encryption. The police want an easy way to do their (admittedly difficult) job. But the price is just too high: mass surveillance, and many false positives, affecting the general populace.
AML laws enforce monitoring so that legitimate businesses have to block or report activity, assisting law enforcement in tracing said criminal activity. It's the most effective way. As the famous saying goes: follow the money.
You're correct on the privacy implications. It's shocking how much data AML monitoring companies have collected about you, there's more data points than any single person could think up. These aren't entities owned by the government - they're private companies.
Also yes money laundering does not require cash but I think the author is highlighting the scale of it. Most countries tax consumption a.k.a VAT and 'hidden transactions' such as cash transactions bypass that.
You can be anti-anti-money-laundering but then you also either have to be a complete anarchist or completely anti-taxation and anti-data-collection by corporations and yet still have a reasonable argument for how this will result in the ability for society to have a government.
I'm not saying the system is perfect - far from any means. However the utopia you describe seems infeasible to me.
Here's an anecdotal thought: AML laws surprisingly work well to discourage offline transactions by tax-paying citizens, helping maximize tax reporting and improve tax collection. As a result, governments continue to strengthen and expand laws in that direction.
It used to be super common for many small businesses to be cash only or a 10% discount for cash. Likely the main driver for this was tax avoidance. I haven't seen a cash only business since covid.
With a dwindling number of legitimate cash users, any business that is pulling in huge sums of cash well beyond the average is going to look increasingly suspicious.
> I haven't seen a cash only business since covid
Collectibles (e.g. trading cards) are still a "cash is king" market. Some dealer only take cash, virtually all of them prefer it, and offer steep "discounts" (lack of markup) for cash.
> Likely the main driver for this was tax avoidance.
It's not just that, though. It's common here in France for credit card operators to have fees in the 5-10% range (or 0.30€ per operation + 2% of the amount). That's why you often see signs « card accepted above 10€ », and that's why your local shop will probably not mind if you're missing 10 cents when paying cash.
> It's common here in France for credit card operators to have fees in the 5-10% range (or 0.30€ per operation + 2% of the amount)
Interchange in the EU is capped at 0.4% for credit cards. Typical costs for processing are much lower than 5-10%.
For example, Adyen charges the 0.4% interchange + their fee of 0.6% and a flat 0.11€. On a 10€ transaction, that's 2.1%.
In most cases this is cheaper than handling cash. When you accept cash, you have to pay somebody to close and reconcile the drawer, take the cash to the bank (or have a security company do it for you), account for shrinkage / mistakes...it's a bit of a myth that cash is cheaper for businesses to handle, especially in places like the EU where card interchange rates are highly regulated.
Now of course, if your cash is not going the usual routes and isn't getting accounted for in the books...that equation can change.
Had a conversation with the landlord of my local pub a few years back, he said he'd go "Card Only" if it wasn't for the handful of patrons that refuse to use card, couple of which are the "Cash is King" Facebook types.
And he was paying his staff under the table in cash anyway! But would still rather just withdraw from the business account, rather than having to deal with handling of customer cash every day.
> With a dwindling number of legitimate cash users
Services for laundering cash are going to see a huge uptick in turnover.
You put the cash in the local slot machine, the slot machine owner then purchases legitimate services from your wife / cousin / other family member’s business.
Or you rent a hole in the wall location massage business that that maybe legitimately employs one or two people but on the books they manage to see back to back clients for 20 hours a day.
Another good one is hair dresser / barber, they often take cash.
My barber loves talking about “creative tax tricks” he does as an all cash joint. More interesting was how he managed to purchase a home despite having very little reported income. It involved friends in the “legitimate” cannabis industry in California, but he got it done.
I’m not sure the stress is worth (presumably) 20% or so savings for his income.
its not just his income. everybody in the cash economy wins. if I take cash and pay my employees in cash, that's a few transactions the tax man misses out on.
quite a bit of labor runs on cash. you can usually get a deal for a lot of services by paying in cash. sometimes the floor manager will take cash and never even report the transaction to the business much less the tax man (I rent forklifts and get plating work done this way).
I've seen barbers before Covid not accepting cash, after Covid happy to accept cash. The Covid rules for subsidies were very strict, sometimes having to repay all as they didn't fully comply. Cash gives protection against bankruptcy due to unfortunate rules.
Still lots of builders/tradies in the UK who do "for cash".
Also lots of takeaways, they'll be on JustEat/Uber Eats and cash-only in store which is a PITA. My local chippy is cash only and no-delivery. I can't find a single record for a recorded business, or health rating either!
I've mainly seen it in small businesses - e.g. food vendors - but instead they charge extra for using electronic payment methods. Also to offset the costs they're making on offering it I suspect, but it does encourage people to pay with cash.
A card tx fee of around 1% is common. At 10% it’s tax evasion.
> but instead they charge extra for using electronic payment methods.
That is illegal in the UK. That is why many trades people here will accept bank transfers but not cards.
Even "minimum charge on card" is against VISA/MC rules. But it's still around.
Varies between countries, and card company rules are not quite as threatening as actual laws.
>> and card company rules are not quite as threatening as actual laws
Well, they are plenty threatening in the sense that if you don't follow them, they will refuse doing business with you, which suddenly means you can't accept cards at all, which can kill a business entirely.
> As a result, governments continue to strengthen and expand laws in that direction.
Which creates national security and sovereignty issues. Cash is robust and decentralised. There is a good reason Sweden went from pushing cashless to advising people to keep cash at home for emergencies, and were at least considering an obligation to accept cash for small transactions.
That's just a disaster planning POV. If you've ever been in a shop where the EPOS goes down, you'll know how chaotic it is. And that's just a macro scale.
> Which creates national security and sovereignty issues
Are you talking about people who don't pay tax? They create very large national security and sovereignty issues. Countries that don't collect much tax have real problems with both of these.
> There is a good reason Sweden went from pushing cashless to advising people to keep cash at home for emergencies
The key phrase being "for emergencies".
As a consumer, I like paying with cash. It's more convenient for me to think about the amount I have on me than to maintain a mental inventory of bank/card balances all the time. That's my business, not anyone else's.
> Countries that don't collect much tax have real problems with both of these.
Nothing like as bad as the potential problem of your economy grinding to a halt.
There are other ways to deal with tax evasion. Those countries usually do not have good systems. If you investigate properly, design tax laws properly, chuck a few people in jail, etc. the problem can be solved.
Not using does not close loopholes, or prevent corruption, or stop people sending money offshore.....
> The key phrase being "for emergencies".
If you go cashless you will not have the infrastructure to use cash in an emergency.
The national security and sovn. issues are when the US threatens to turn off the system, or starts sanctioning individual non-US nationals.
Or an enemy state of criminals attack centralised systems. Or even just a failure. I think Sweden's biggest concern is the threat posed by Russia.
I learned a lot about the AML system many years ago and still have some books about how it works on my bookshelf. It's fascinating stuff.
A few minor comments.
My wife and I have owned and used 1000 CHF notes quite a few times in the past. The last two times we moved apartments I paid part of the moving fee with a 1000 CHF note. We've also bought furniture this way. Nobody was surprised to see this and the notes were accepted without question or comment. To a person who spent their life in Britain this sounds absurd because the British government has - true to form - been trying to wipe cash out for many years to improve surveillance. You can't get any high value notes there, they just don't exist, because the state assumes that anything it can't see must automatically be suspicious. And there's so much street crime, and the police care so little about burglary, it would be very dangerous to hold such notes. But in Switzerland it's safe and the government doesn't try to wipe cash out, so paying with high value notes is common. (Although bank notes are in no way as private as people assume and can be tracked quite well, because they don't tend to circulate far.) This situation makes a mockery of the recommendation to fight crime by removing high value bank notes. The UK did this already and ML is out of control there: criminals just don't care.
I looked into the case of George Cottrell once. The case against Cottrell collapsed because it was founded on entrapment (the eight months was a plea deal in the usual American fashion, and doesn't mean much). It boiled down to undercover FBI agents asking Cottrell, "how could we launder money" and he explained how to do it, in the way anyone familiar with the topic could. He didn't make any offers to actually do it, didn't do it, and that's why "could be jailed for up to 20 years" turned into an eight month plea bargain to let prosecutors save face. Then after he was released he trolled US LE by writing a book called "How to launder money". Usually not given is the subtitle: "A guide for law enforcement and politicians". It's not written for criminals but people love to omit that detail.
Carousel fraud in the EU is a huge problem that governments hate to talk about because they don't know how to fix it and fear that by talking about it, they'll just teach more people how to do it. It's an infinite money glitch but in the real world. It's interesting that the UK thinks they solved it. I suspect they didn't, rather, enforcement collapsed elsewhere and it became easier to just go back to other ways of scamming the government.
> The UK did this already and ML is out of control there: criminals just don't care.
From 18th May:
“A new £30m High Street organised crime unit has been announced by the government after the BBC's year-long investigative reporting into illegal mini-marts, vape shops and barbers.”
https://www.bbc.co.uk/news/articles/ce3pzwx449no
Of course, remains to be seen what, if any, impact this ends up having.
> You can't get any high value notes there, they just don't exist
Yes, although this is mostly by capping the highest regularly circulating note at £50 after the war and then waiting for inflation.
> And there's so much street crime,
[mostly false]
> and the police care so little about burglary,
Sadly true (including "find my iPhone" reports; there was a joke during the Mandelson scandal that this was the one time the Met had managed to locate a phone)
> The UK did this already and ML is out of control there: criminals just don't care.
Yes, which makes a sort of orthogonal point about whether or not cash is actually important for this. There's the conspicuously suspicious businesses ("American sweet shops"), but also more complicated stuff going on (Scottish Limited Partnerships were in the news). Then there's all the Crown dependencies, which are a total financial wild west still.
> Carousel fraud in the EU is a huge problem that governments hate to talk about because they don't know how to fix it
God yes. This is a significant problem in VAT as a concept; I don't understand why the EU loves VAT so much.
>>Sadly true (including "find my iPhone" reports
I'll give you one better. I know someone who had their nearly new Range Rover stolen in Manchester - reported to the police etc. Few days later, they found it parked at a car park near a big supermarket. Rang the police, they said well, if you still have the keys...just take it? And he was like hang on, you don't want to look at it, check for drugs, take fingerprints, you know, do any actual police stuff stuff around stolen property? And they were like nope, don't have the time or the people to come out, if you have the keys just take the car back and make sure you tell your insurer you got it, that's all we can do.
I'm not suprised that in the swiss economy no one bats an eye at 1000 CHF bank notes. After all the swiss are historically known for being the classy alternative to launder and store your ill gotten gains from, for example, your stint as the dictator of an African country.
But there has been some changes in recent years so I don't know how it is today.
The absolute peak of that was, of course, during WW2 when vast amounts of stolen or looted money, gold, and other valuables ended up being laundered through Switzerland and kept in anonymous accounts. Mostly by Nazis, although not exclusively. There was a long campaign of litigation by the descendants of Holocaust victims to get some of it back.
In the 21st century the US eventually pressured them into not being a tax haven for anonymous money hidden by US nationals.
The twin questions of tax and terrorism remain as pressure against money laundering.
>To a person who spent their life in Britain this sounds absurd because the British government has - true to form - been trying to wipe cash out for many years to improve surveillance.
Oh come of Facebook for christ sake. Absolute hogwash.
The true crime is involving a multinational corporation in a transaction between two private individuals at the local market.
I like cash because it's direct, and where possible I avoid paying by card because I don't want the merchant to pay fees to third parties.
In Europe, most of the time, using cash doesn't imply avoiding taxes on the transaction, but having cash is essentially sovereignty.
FYI, handling cash has fees to "third parties" too.
In a lot of cases it's a lot higher than just taking card.
My business needs to insure cash that we keep at the shop in case we get robbed, but that amount is much much less than we pay in credit card fees. In other words, we would much prefer customers to pay with debit or cash.
How can one write about money laundering without talking about crypto currencies ?
In Italy there is a very aggressive law against money laundering: if you withdraw more than 1k cash, it triggers a call to the police. I know it's the same if you do it over multiple days.
I think it has been relaxed a little bit later on, but in Italy everybody does the "I'll charge you X less without VAT" (which is 23% in Italy, I should point out), so this is also fighting that.
In other words, the Italian police are flooded with more reports than they could possibly investigate.
A great opportunity for selective enforcement!
Also parallel construction. "We caught him due to reports from his bank." (That's not how they caught him but those reports did exist.)
Presumably the police computer system is told about the transfers automatically and it has no capacity problems. I know my own country has long had such a system and these days is almost entirely cashless.
That wouldn't help in the situations described in the article. For example where individuals buy drugs with small amounts of cash, then that cash is used to buy things like luxury watches and iphones, then those items are taken overseas and sold.
Seemingly the only effective way to solve this would be to ban purchasing highly resellable items with cash and requiring that cash to be deposited in to the system first.
In Italy, it’s illegal to pay in cash anything over 5000 euros
Sure but presumably you could buy as many $4000 handbags and watches as you want. If it’s not being tracked it would be hard to pick up.
Ok, but 5 smurfs buying 5 €4999.99 watches is still €25k
You cannot have a transaction in cash of that size. Loundring is about converting the dirty cash back to normal money, but the idea is to force you to go through a bank
Does that mean it's illegal, or that they'll just come knocking to investigate?
I wonder if the "it's my money, I can withdraw it if I want" argument is good enough to send them on their way? (in addition to $1,000 being such a small amount as to be less-than-trivial when it comes to the overall problem of money laundering).
I think the limit is 10k and withdrawals over 1k get bundled. If you hit the limit you get reported to the Unità di Informazione Finanziaria (Financial intelligence unit) and what they do is under their discretion.
Oh so it was raised back to a higher amount
withdrew 2-4k rent for a few months in 23 and never saw any cops.
You mean they implemented laws under the guise of "money laundering".
They just want to track what you spend your money on, that's step one. Step two is to restrict what you can spend your money on, although this is a partial side effect of part 1.
You're onto something, but from some Romanian local investigations and public statements into similar cluster of laws [0], it's just something banks lobby for, so they can have more control and consolidate their place in any transaction chain. Maybe govt benefits a little, but when you see limited cash withdraws or commercial transactions requiring a bank system, it's usually private gains at play.
[0] (Romanian article) https://economedia.ro/parlamentarii-usr-au-depus-un-proiect-...
Actually the privacy legislation in Italy is pretty strong. With the gdpr, banks have more challenges to do what they do with data in the US. Government might be tracking everybody, the goal of the law for sure is that.
It's hard to say what happens with all of that.
> Step two is to restrict what you can spend your money on
Where do people get these ideas? How do they sincerely hold them?
No non-religious government wants to restrict what you can spend your money on. They want to get a cut of your money, but otherwise it's strictly better for them if you spend as much of it as possible.
If they don't want you to have things, they just attack those things directly, like hard drugs or weapons. No need to restrict your ability to purchase.
>In July 2025, Visa and Mastercard pressured major digital storefronts Steam and Itch.io to delist thousands of adult and NSFW games.
Yes, that's exactly what I'm talking about.
Let's ignore the fact that that was done by private companies and not directly by a government.
The mechanism is to make it so undesirable objects are not available for sale. The above comment is implying these things would remain legitimately for sale as normal, but you would be unable to spend money on them.
People get these ideas from the numerous examples of cases where it happens.
https://news.ycombinator.com/item?id=48338657
Aside: The author of this article wrote a fantastic novel that not a lot of people know about called “The Debt to Pleasure”. One of the best instances of the “unreliable narrator” I’ve ever read.
Good to know, thanks! This article was such a breath of fresh air compared to the usual "LLM-assisted" writing you get.
Just sentences like this:
> This isn’t just a problem for far-off countries of which we know little, like the EU and the US and China. Here in the UK [...]
So good! I feel like I'm becoming an old cynic but if it's the tenth time on the day that I read an overdramatized "It's not X, it is Y" in an article, actually good writing just hits different.
Not a fan of AI writing but I find sentences like that to be fluff and would prefer a more concise article overall. That would also have been my critique prior to AI and is the reason I only made it about half way through.
This is the London Review Of Books. They will be one of the last bastions of non-AI writing, because they actually care.
It’s depressing how hard it is to find anything worth reading on HN lately. Everything is either an advert or slop essay.
The article here is outstanding.
Phenomenal author indeed. "Capital", a novel about the financial crisis and bankers on the hedonic treadmill, is wonderful too. Too bad either Lanchester or his publisher has beef with Amazon, most of his work is not available as an ebook.
" Bullough gives the example of a Mexican drug dealer who smuggles product across the border to the US. The drug in question would once have been marijuana, then cocaine, and is now likely to be fentanyl, which is cheap to manufacture and easy to conceal. The drugs are sold in the US for cash, which is used to buy, say, agricultural equipment. "
Wouldn't the person buying the tractor in the US for $$$ have to show where that money came from? Can you show up to John Deere with over a million dollars _in cash_?
The short answer is yes. You can buy cars, trucks and tractors for cash. The more expensive the car, the easier it often is. Luxury cars in particular are routinely bought and sold for cash.
Not in the US without the dealer doing all the same work a bank accepting $100k of cash in a duffel bag would be doing. Plus filling out a suspicious activity report on top of it all. They might have a real hard time explaining to the feds that they truly did "know their customer" from a simple form and a photocopy of your ID.
Some dealers might be willing to do this for you, but most will not. They will direct you to your local bank to deposit the money and get a cashiers check instead. They do not want the liability of it all. Perhaps better chances at the Ferrari dealer you've bought 14 cars from over the past 30 years I suppose?
I asked my (luxury) dealer if I could pay cash the last time I bought a car and they basically said “hell no, we haven’t done that in over a decade”. The risk of being caught up in some drug money investigation or whatnot is too great.
Coincidentally showing up to your bank with a duffel bag worth of cash to deposit is a great way to both get your accounts closed, as well as be added to a blacklist so it will be very difficult to open an account anywhere else.
Luxury cars are frequently bought outright without debt, yes.
Literal cash, as in actual paper pieces of money, is not a common medium to do so.
> Luxury cars in particular are routinely bought and sold for cash.
Cash? As in hundred dollar bills?
Yes, duffel bags full.
But it doesn't take too many cash purchases that are not inline with your tax returns before somebody is going to start snooping around.
edit: although sometimes, a lot longer than one might expect.
> Yes, duffel bags full.
Citation needed? Where did you hear that this is a routine occurrence? That seems risky for everybody involved, and it requires a report to the government from the seller.
Selling a car usually does require a report to the government. Why would the seller care what happens down the line to the buyer?
Disappointly small bag to buy most cars with 100 dollar bills
I don't know about the US. The EU limit on cash transactions differs by country, with a legal maximum of 10k€. Belgium and the Netherlands for example are at 3k€.
All of Bullough's books are worth your time and variously go deeper into this very subject.
Unrelated, but I love finding lower-case numbers in the wild!
(Note the two and the zeros in “$20 billion to $80 billion.”)
These are called text figures, as opposed to lining figures: https://en.wikipedia.org/wiki/Text_figures
POSWID* says that money laundering laws are intended mostly to keep the proles and other people within the system honest, while providing a clean and easy system for people with enough money or cachet to bypass it.
* https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_wha...
I always thought the TV show Ozark was fairly accurate in it's depiction of money laundering. The family would buy a small business that they could inject cash and cook the books with fake sales.
any tips based job; serving/waiting, stripping, bartending, etc. gig/service work. freelancer websites that offer escrow, etc. Shopify. Hell, github sponsorships. You don't even need a physical store these days, or a business for that matter. Cashapp even. The list is endless and it's easier than ever.
Now I just need some dirty money to go through the hassle of cleaning
Here are the last two sentences:
> Governments don’t do anything about the status quo, for a number of reasons: it inconveniences them to look too deeply into the darker corners of their own financial systems, and they make money from printing their own currencies and don’t much care how that cash is used. But most of all, they don’t do anything about it because they haven’t got a clue.
The last one couldn't be farther from the truth, and the first one couldn't be farther from a lie.
> I reckon the luxury watch trade is 80 per cent money laundering
Found this quote interesting given Europes richest person is the head of a luxury brand company.
I always wonder who was buying all this high end stuff - the concentration of wealth has created a more billionaires - but they aren't that many of them and there is only so many watches one person needs.
It also may explain why China is struggling to establish it's own luxury brands - the money laundering prefers that cross border flow.
It's very simple, there is more incentive for money laundering than there is fighting it. It's the same reason there are more lawyers working for large companies vs small guys. The invisible hand that determines the structure of our society.
Seems like the reason Australia dragged its heels on AML changes for property purchases. Propping the property market up was more important than stopping crime.
In war the side that knows what they are fighting for generally wins.
The state's ability to track and criminalize people based on financial behaviors through deputized financial intermediaries is new, and temporary.
Outside of this social graph, where private cash transactions still exist, the state lacks power and relies on stigmatizing cash ownership, consumption, movement. This stigma is largely successful and ubiquitous but inconsequential to anybody that matters or has a lawyer of their own.
Electronic settlement of funds since the 1970s has allowed for the state to leverage financial institutions for records and enforcement. Electronic settlement without institutions since the 2010s removes that power from the government and is merely a reversion to the mean. Any delay in the prevalence of this is both user-error, social stigma, and a government's unfamiliarity with the reality that their own constitutions and documents that organize the state are things that have to be updated to actually remove an expectation of privacy from finance.
> We don’t know what successful money launderers are doing in the present moment. All we do know is what unsuccessful ones have been caught doing in the past.
One major and necessary fallacy inside the social graph is that electronic settlement between institutions assumes that the deputized institutions have blessed the funds and user as not money laundered. Only the user and who they transact with can trigger an investigation by the government at this point, by reporting the money for taxes or in a large withdrawal to cash out of the social graph, without further laundering it. This user error is mostly mitigated as soon as cross border payments are done, because the next financial institution doubly assumes funds from another country's banks are clean. The banks and sovereignty become the washing machine inside the electronic settlement system.
This is doubly important to realize, because it's the tip of the iceberg in brand sovereignty. One country's illegality is not another country's illegality.
You can't simultaneously be for a stigma against withdrawing large amounts of cash, while considering the Communist Party's capital controls to be oppressive. Removing one capital control, blesses the other.
This is a blind spot for most people, since they don't consider them to be the same things, but fortunately this cognitive dissonance highlights the reality. It is impossible to completely stigmatize and the capital routes around the stigma and all capital controls, unless the entire world is under a single totalitarian regime.
All while only the edges, moving between physical cash and electronic system, and moving cash between borders and the electronic system, are policed, in what could really only be the ultimate hubris of expecting the state to be involved at all.
And it's not just cash. Its assets too. The state is hoping for titled and electronic settlement of assets. In the last 30 years a systematic global dismantling of explicit "bearer assets" has been done, when the bearer assets were offered by the state. But this is also unsuccessful, as since the 2010s, the bearer assets created and settled without a financial intermediary have existed and been wildly popular.
All capital controls have been obsoleted while they were never fully implemented to begin with. No matter whether that's the idea of your neighbor holding a lot of physical cash, or a subject of the Communist Party in another country circumventing capital controls you consider oppressive.
This article covers the same points with a wildly contrived conclusion: To attempt to change anything in favor of the state being more effective at enforcing its invented crime of money laundering instead of curbing the actual illicit behaviors. For reasons that are assumed and unexplained, so it's impossible for me to change my view on. My view is simple - capital controls are dead and a waste of time. The article and both books it references actually agree on that. My other view is that the state should just do classic investigative work on illegal behaviors which means finding the people involved and subpoena-ing them, something it seems to have forgotten how to do in favor of relying on deputized intermediaries who are temporary, ineffective, and inconvenience just the law abiding.
Where cash is stigmatized? I haven't seen such a place except PRC.
Most people want government to be able to seize assets of baddies. It is possible with cash, it is possible with banks, hardly possible with crypto.
The technology to scam people at scale with untraceable emoney is not everybody's cup of tea.
Speaking from a country that invaded its neighbor, for our government (as well as north korea) it is lovely to have a way around sanctions. Libertarian crypto bros of the west are a godsend.
They are also a godsend to current American president which loves a nice side of washed crypto along with all the other theft.
It is absolutely possible to like cash and dislike crypto
I don't understand what is meant by "hardly possible with crypto." I've been hearing that for a long time but I've also heard so many stories about theft of crypto assets and seizures by government. In the US that seems to have slowed to near nothing with the current administration but it doesn't seem to be a capability issue. Or maybe I misunderstand you or the situation?
>Most people want government to be able to seize assets of baddies.
I dont, not while they get to decide who the baddies are.
This is correct attitude, for example some people actually got arresred for supporting ukraine efforts on war. I disagree that all my assets must be seized because i donated few bucks for sake protecting invaded country.
Ukraine event's is prime example why finanical privacy is important. I think we're solving taxing issue from wrong angle, we should be look this another angle: Merchants should be identifiable and taxable while customer stay private. GNU's solution "Talor" is very interesting and promising.
Everyone in China has to and will accept cash in practice (no idea about big transactions though). Cash is also more frequent among locals in remote places.
Also if you're talking about Russia, people are switching back to cash en masse because cashless transfer between people is essentially half-criminalized. You run the risk of getting all your bank accounts blocked instantly on mere suspicion or for things outside of your control, with almost no real rules, accountability, or practical ways to push back. It's the way to avoid the runaway government process in the first place.
>Where cash is stigmatized? I haven't seen such a place except PRC.
I don't know about stigma, per se, but there are a few places where businesses have a pretty explicit legal right to refuse cash, UK, Netherlands, Sweden, US. Oddly in PRC refusing cash is illegal.
Because "cash" isn't actually real, it's entirely a form of completion of a contract. The same contract that you could agree to complete by trading chickens, or bottles of bath water.
there is high consensus on that, but not high enough to enshrine it into the constitution. in countries with strong rule of law, the courts have continued to uphold this whenever the state gets bold enough to move on a previously tolerated "baddie"
capital, as an aggregate expression of people's desires, moves like water. if will flow through any small opening
capital controls will flow through any weak link, whether that's a Shanghai free trade zone, a freeport at the airport in JFK or Zurich, physical cash, illiquid assets traded through a trust, or natively in crypto, or crypto wrapped within the same aforementioned structures, no matter what the prevailing or commoner's view is everywhere else in the region
even countries that can change on the whims of an all powerful head of state, they don't really mess with the capital because it drives everyone else away and reduces the head of state's own liquidity and economic driver.
Alternative to archive.ph
Disable Javascript and CSS
For example
There are also Firefox add-ons that can do this as wellOr use a text-only browser
BPWC is good as well, but I would keep it in a separate browser profile.
In this day and age "money laundering" just means "not bending over and letting the state tax you to oblivion". TFA is just scare mongering.
People need to learn about Bitcoin.
You might want to check out Monero. It's like Bitcoin but actually usable for purchases. And it's private.
> People need to learn about Bitcoin.
Indeed. Bitcoin is now a major player in the money laundering business. NFTs are so much better than fake pocelain!
> I can invalidate Bitcoin, by comparing it to NFTs.
I'm sorry, that's not how it works.
It's not so much invalidating Bitcoin - Bitcoin is valid and effective. Unfortunately what it is extremely effective for is money laundering and tax evasion (which was what your original comment seemed to advocate for.)
First off, money laundering does not require cash. So the premise is a bit strange.
Second, I submit that money laundering should not be considered a crime at all. Monitoring it (for example, banks required to report large cash transactions to the government) just leads to mass surveillance of innocent people.
Transferring money from A to B - why should that be a crime? The point of anti-money-laundering laws is that the money generated at point A may have been generated illegally. It isn't the money transfer that is the problem, it is the illegal activity. The police need to put in the effort to prosecute that illegal activity.
This is reminiscent of the continual pressure to break end-to-end encryption. The police want an easy way to do their (admittedly difficult) job. But the price is just too high: mass surveillance, and many false positives, affecting the general populace.
AML laws enforce monitoring so that legitimate businesses have to block or report activity, assisting law enforcement in tracing said criminal activity. It's the most effective way. As the famous saying goes: follow the money.
You're correct on the privacy implications. It's shocking how much data AML monitoring companies have collected about you, there's more data points than any single person could think up. These aren't entities owned by the government - they're private companies.
Also yes money laundering does not require cash but I think the author is highlighting the scale of it. Most countries tax consumption a.k.a VAT and 'hidden transactions' such as cash transactions bypass that.
You can be anti-anti-money-laundering but then you also either have to be a complete anarchist or completely anti-taxation and anti-data-collection by corporations and yet still have a reasonable argument for how this will result in the ability for society to have a government.
I'm not saying the system is perfect - far from any means. However the utopia you describe seems infeasible to me.