Comment by lmm
1 year ago
As always, he moves the cup so flashily for so long that you forget that you never saw him put the ball under it in the first place. If you take it as read that Binance (the largest threat to his business interests) really are evil, then of course destroying any bank willing to serve them is perfectly justified.
I also love the impersonal gloss over the actions of all the bank employees, as though all the Operation Choke Point crimes were carried out by machines directed by the politicians and regulators, and not humans making the choice to be Quislings. Look at the quote from Zuckerberg where he expresses regret for the poor choices he and his company made, and note the conspicuous absence of anyone doing the same from the banking/finance industry.
Those of us who've been paying attention are not hearing about debanking for the first time now, we've been banging this drum for years. In a country with the US' asset forfeiture laws, denial of banking service is de facto denial of the human right to own property. The current situation in the US is shameful, and while part of that shame should fall on the politicians and regulators, much of it rightly falls on the banks themselves. (Nor is it that an alternative is impractical. The UK made it legally obligatory for banks to offer "basic bank accounts" to everyone in 2016, and the sky has not fallen).
I have no love for the crypto people, but they're fighting for the right thing here (whether they're doing so out of good motives or bad) and I hope they succeed.
> The UK made it legally obligatory for banks to offer "basic bank accounts" to everyone in 2016, and the sky has not fallen).
This did not avoid https://en.wikipedia.org/wiki/Nigel_Farage_Coutts_bank_scand...
However there's a vital layer of ambiguity in that story which made it more confusing for everyone involved: Coutts is a long standing "private bank" which makes a point of not serving everyone, only HNWIs, and Farage fell into both the "not rich enough" and "too politically exposed" categories.
> The current situation in the US is shameful, and while part of that shame should fall on the politicians and regulators, much of it rightly falls on the banks themselves
Like the lack of consumer protection and public safety in the US, at some point you have to accept that the public are also ultimately responsible through the ballot box. US financial control systems are driven firstly by the catch-all "war on terror", which since 9/11 has been used to justify any and all authoritarianism with public support, war on drugs ditto (despite state level legalization!), and thirdly evangelical support for Operation Choke Point.
The Farage situation hardly applies as an example, if at all.
From the linked Wikipedia page:
> NatWest, the owner of Coutts, initially claimed that he failed to meet the Coutts eligibility criteria of holding £1,000,000 or more in his account, following the expiry of his mortgage. NatWest instead offered him an account with the retail side of the bank.
So it's hardly a case of debanking a random Joe. It was only a higher-end account that was closed for not keeping the requirements for keeping it, and Farage was offered a normal account.
Oops, you "forgot" the rest of the quote:
"After Farage went to the press about the closure, it was discovered that Coutts had closed Farage's account as they deemed him to be "at best seen as xenophobic and pandering to racists". Following media attention, the NatWest CEO, Dame Alison Rose, resigned."
And of course, debanking is not used against any "random Joe", it is a weapon to make sure the random Joe stays nothing more than a random Joe and does not express his opinions or reaches for any political influence not sanctioned by the bankers.
From the same Wikipedia article:
> It was later revealed that Farage's account was closed in part as Coutts felt that his beliefs and values did not align with theirs. In an internal dossier, Coutts wrote that he "is at best seen as xenophobic and pandering to racists" and considered a "disingenuous grifter".
> initially claimed
> This did not avoid https://en.wikipedia.org/wiki/Nigel_Farage_Coutts_bank_scand...
I almost wrote about that case, but my post was getting long enough already. He was denied the fancy account he had and offered a basic account. Obviously you can have concerns about that (and note that this was a scandal, and ultimately brought down that bank's CEO), but it's certainly orders of magnitude less bad than being denied access to the banking system entirely.
> at some point you have to accept that the public are also ultimately responsible through the ballot box
Up to a point. Abusing some small minority is a well known failure mode of democracy, especially if you can paint that minority as bad people. And arguing that the public shouldn't be outraged about this because the public obviously approved of it is circular and backwards. Who do you even vote for to express outrage at debanking? It seems like the sort of thing that the CFPB should be stepping in to stop, so you vote D, but if you believe what the article wants you to believe (you shouldn't) then the problem is FINCEN so maybe you vote R and hope they dismantle it? IDK, flip a coin?
So you are saying that a private company, i.e. the bank must service the crypto industry even though it is going to mean they will suffer massive losses in doing so?
See my explanation of why it is an extremely costly venture for banks.
My position is that banks (which are not "private companies" as normally understood, but heavily regulated entities whose status already involves a complex bundle of special rights and special obligations) should be obliged to provide basic banking to any legally operating individual or business, just as they are already obliged to offer various services that they probably would not if they had a free choice.
If they are unable to figure out a way to provide basic banking without extending credit in the way patio11 describes then this will of course be extremely costly for them, but I suspect they would figure out a way to not have to extend credit rather quickly (hint: look at what banks in virtually any other country do) if they actually tried. If not - i.e. if the current price of banking is only sustainable when banks are permitted to arbitrarily refuse service - then I guess prices will have to rise to something similar to what they are in countries where banks already have those kind of service obligations. Again, that doesn't sound like such a terrible fate.
Okay, now I understand, you know very little about banking. I started a bank so I will try to help.
Banks are mostly private companies (most are listed on stock exchanges) so public companies in that meaning, but in most cases they are not government owned. I was meaning private in the sense they are not public owned entities by the government.
Banks are highly regulated.
Regulations require banks to manage their risks mainly liquidity and capital risks plus operational risks.
There is no laws mandating banks must bank everyone and every business.
There are laws that mandate banks must not take on excessive risks.
Banking is a principle based regulation. This means the governments set laws based on guidelines of how banks meet the obligations.
Banks are managing their customers constantly and any customer that represents unmanageable risks mainly liquidity they must remove them from their balance sheets.
It is the crypto industry fault that they refuse to take the actions and accountability to work with the banks.
This doesn’t only happen in crypto.
Crypto is highly volatile and liquidity is unmanageable for banks. When I spoke to the regulators, we were told we had to hold 100% liquidity for deposits intended for crypto. There is zero ability to recover the losses of the liquidity obligations.
Like all businesses, banks have the right to refuse to service customers they don’t want to serve because the costs exceed the income.
On the flip side the crypto industry is refusing to accept the additional costs and refusing to derisk their platforms.
1 reply →
I completely agree when it comes to personal accounts, but the restrictions required to avoid extending credit make such accounts impractical for any realistic business purpose. You can’t, for example, allow the customer to write checks.
4 replies →
Not familiar with the UK version, but these kinds of regulations usually apply to personal bank accounts and do not require extending any credit. So you'd only get a basic bank account that cannot be overdrawn, nothing more.
Not familiar with UK either, but in PL, you're mostly right, with the addition that you can also use this account for simple business, aka "one person company" for which you don't need to have a separate account.
The cost is here due to AML regulation. If government wants to outsource its duties (crime intercepting) to banks, then perhaps it should be government to pay for it (in the similar manner it pays telecoms for wiretapping).
I fully agree that the cost of the AML/CTF should be on the government.
However a bank still needs to work out if they will risk accept customers.
For example my CRO presented to me the cost of enhanced due diligence for Delaware companies. It was cost prohibitive so I argued that we should not bank customers who are too complex for the next 12 months.
> Look at the quote from Zuckerberg where he expresses regret for the poor choices he and his company made
I'm sure Zuckerberg does have regrets, but I think it's a mistake to assume they align with actual human interest except by coincidence. The state of Facebook today, and for many years before, has nothing to do with any honest concern for human welfare, however misguided.
> and not humans making the choice to be Quislings
What is with the obsession with calling people quislings? Have all the nationalists transferred their hyper-patriotism to more socially acceptable targets, instead of just learning not to be like that?
If it's a current trend then, much like with complaining about debanking, it's one that I was years ahead of the curve on. Humans should not blindly follow orders, and that you were following orders from the legitimate authorities does not absolve you of responsibility for your choices.
It's dehumanizing language that encourages violence.
Maybe this is a minor quibble, but Quisling was a person. Thus, drawing parallels between Quisling’s actions and those being characterized is not dehumanizing.
https://en.wikipedia.org/wiki/Vidkun_Quisling
How so?
[flagged]
I don't think I've ever seen anyone claim that businesses shouldn't be regulated.
Like everything related to politics it's about plausible deniability.
The founding fathers sold their ideas as freedom from the tyranny of the crown. While this was true, they probably didn't care as much for the freedom of the average Joe, but their own freedom and that of their rich friends. They just needed the freedom of the average Joe to get the masses on board without blatantly lying about their actual goals.
The rich people of crypto see themselves similarly, selling their ideas as freedom from the tyranny of traditional finance; and they have a point: There are millions of average people out there who suffer by the hand of financial institutions. However, the goal of the crypto "elite" is mainly the freedom of their own and their rich friends, they just need the freedom of the average Joe to get the masses on board.
Now, the only thing left to argue is if the rich people from back in the days had a better case against the crown as the rich people from today have against traditional finance.
>denial of banking service is de facto denial of the human right to own property.
Is property ownership a 'human right', or a 'human privilege' (nod to George Carlin)?
It's literally in the UN declaration, and widely accepted as a basic right. If some philosopher thinks there is some sense in which it isn't a right, so much the worse for their philosophy.
The UN is not a moral authority and utterances endorsed by it have no more moral weight than any other political organisation.
2 replies →
All rights are unnatural. Therefore “we” get to collectively agree on what rights all people ought to be granted.
I believe almost anywhere you go you’ll find that most people agree to consider property ownership to be a basic right.