FinCEN has a lot of valuable records. Some of them are leaking.
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FinCEN has a lot of valuable records. Some of them are leaking.
In Hong Kong, a media tycoon and democracy activist, Jimmy Lai, is arrested. His company is publicly traded. So people who support his advocacy start buying his stock up as a show of support. This causes the stock to jump over 1,000% in a few days.
Now local authorities have arrested 15 people for market manipulation relating to the stock. I’ve never heard of mass stock buying as a form of activism. I guess that could be a form of market manipulation? The actual accusation seems to be more benign, but I don’t believe them.
Also in Hong Kong: A museum is raising money to digitize its collection of historical materials that may soon be banned or destroyed under the new regime. The ethereum public blockchain has been used in similar situations where censorship is a risk, though not at this scale.
Nic Carter attempted financial terrorism on my Venmo account
It’s been a source of frustration for Persian and Cuban Venmo/PayPal users that they can’t reference their heritage when making transactions. This is because their cultures are flagged for potential sanctions violations (North Korea, well, okay you can have that one).
Recently this absurd compliance system was back in the news because science nerds found themselves unable to purchase plushies and other toys relating to a beloved creature—the tardigrade.
It turns out, there’s another Tardigrade. One that is not so cute but perhaps similarly resilient.
This isn't only an algorithmic fluke or extreme prejudice against indestructible moss-piglets, but a US sanctions issue that can be traced back to a coincidentally-named shell company used by a weapons dealer who's been banned from traveling by the UN for a decade.
Slobodan Tesic, one of the biggest arms and munitions dealers in the Balkans, owns a company called Tardigrade Limited that he used to export weapons to Arab and African companies, according to a Cyprus-based news outlet reporting on the new US sanctions last year. He’s been called “the biggest dealers of arms and munitions in the Balkans.”
So the word “tardigrade” got put on a list, and now anyone trying to use this word has to jump through hoops to get their transaction cleared. Science nerds can deal with it and call their stupid microscopic water bear something else.
Anyway, Nic did send the transaction. In case you were wondering, it did not lock our accounts. It just freezes the money. Now both of us are being questioned about the transaction and asked for receipts and documentation. I don’t think they are going to like our explanation.
Here’s something to watch:
FinCEN has a LOT of records of financial transactions. At the very least, there are records of every transaction over $10,000. By the way, that amount does not adjust for inflation.
The $10,000 threshold was also set low enough that criminals anxious to get a million dollars’ worth of cash into the banking system might think twice. After all, they might have to give up potentially incriminating information.
Back in 1970, $10,000 would have purchased around what $68,000 would today (see chart below). Today, it doesn’t even purchase a new car. So transactions that didn’t come close to triggering CTRs in 1970 now set them off. This means ever more invasions of privacy and higher costs of compliance.
Financial records are incredibly sensitive. Access to those can tell you a lot about a person. Our banks are required to turn this info about us over to the government. Until now, the expectation has been that at least they will be kept safe there.
If a leak of these records bears out it could have serious ramifications on our trust in this surveillance system. Sure, this is probably a targeted leak, but it’s a reminder that at the end of the day humans have access to this information and we trust them to keep it safe.
Russian Intelligence seems to have caught on. I’m always surprised when people don’t know about this. There was a deliberate attempt to access FinCEN’s financial records on prominent Hillary Clinton supporters. As Buzzfeed reported:
Analysts at an elite agency within Treasury first warned supervisors in 2016 that the Russians were “manipulating the system” to conduct “fishing expeditions.” And they raised fears that the Treasury’s internal systems could be compromised by viruses contained in emails from the unofficial Russian accounts. But staff continued using the Gmail back channel into 2017, despite repeated internal warnings that Russia could be trawling for sensitive financial records — including Social Security and bank account numbers — to spy on, endanger, or recruit targets in the West.
I will be watching closely to see what comes of the FinCEN leak. But in particular I’ll be watching for reactions to what will be a revelation for some: that such a trove of data exists in the first place.
They made me host a podcast again.
This time I got to talk to free speech advocate Sarah McLaughlin. If you’re at all interested in the censorship topics I cover in this newsletter, you will probably enjoy the podcast. Sarah focuses on campus free speech with a side interest in blasphemy.
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