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The criminal money and money laundering has been researched since 19th century. It has stayed at constant 2-5% of world GDP. However the cost of compliance has

The criminal money and money laundering has been researched since 19th century. It has stayed at constant 2-5% of world GDP. However the cost of compliance has gone up exponentially. Today banks use $250B/year on KYC checks. You could fix the world hunger and still have $50B leftover money with this amount.

owebmaster 5d ago
> Today banks use $250B/year on KYC checks. You could fix the world hunger and still have $50B leftover money with this amount. How about getting $200B from the profits to end hunger first then reduce the money spent on KYC?
rapatel0 8d ago
It's not a fair comparison. Money laundering controls likely have also been implemented since the 19th century in some way shape or form. Therefore, that 2-5% figure also includes the effect of those controls. This might just the natural equilibrium below which the juice is no longer worth the squeeze. Access to information and interconnectedness have also increased exponentially so it might make sense that the costs have increased proportionately. Finally 200B/year would not solve world hunger if nefarious actors grift away most of that money (especially because you wouldn't be able to track them with out some form of KYC)
- ryandrake 8d ago
  You also have to ask if money laundering is bad enough of a crime to warrant all of the overkill responses to it. At some point the medicine becomes worse than the disease. Lawmakers tend to get into these inescapable loops: Crime X exists -> Try solution Y -> Crime X still exists -> Try harsher solution Y0 -> Crime X still exists -> Try harsher solution Y1 -> Crime X still exists -> Try harsher solution Y2...
  - bdangubic 8d ago
    > Crime X exists -> Try solution Y ... I think the problem here might be that while Crime by its definition might be the same, the way that it is executed changes drastically so Solution Y/Y0/Y1/Y2 are not required to exist in terms of severity (very likely solution Y was severe enough if you were tried and convicted of the crime) but they are needed because the way Crime X is executed changes (especially this Crime X)
  - rapatel0 7d ago
    Maybe, but you also have to recognize that organized crime is a system. Easier money laundering will necessarily incentivize and enable more crime.
cousinbryce 8d ago
The board of directors recognizes the cost savings and immediately start solving world hunger. Meanwhile a gangster in Moldova intrinsically knows that world money laundering has hit 5% GDP and decides not to.

owebmaster 5d ago

> Today banks use $250B/year on KYC checks. You could fix the world hunger and still have $50B leftover money with this amount. How about getting $200B from the profits to end hunger first then reduce the money spent on KYC?

rapatel0 8d ago

It's not a fair comparison. Money laundering controls likely have also been implemented since the 19th century in some way shape or form. Therefore, that 2-5% figure also includes the effect of those controls. This might just the natural equilibrium below which the juice is no longer worth the squeeze. Access to information and interconnectedness have also increased exponentially so it might make sense that the costs have increased proportionately. Finally 200B/year would not solve world hunger if nefarious actors grift away most of that money (especially because you wouldn't be able to track them with out some form of KYC)

ryandrake 8d ago
You also have to ask if money laundering is bad enough of a crime to warrant all of the overkill responses to it. At some point the medicine becomes worse than the disease. Lawmakers tend to get into these inescapable loops: Crime X exists -> Try solution Y -> Crime X still exists -> Try harsher solution Y0 -> Crime X still exists -> Try harsher solution Y1 -> Crime X still exists -> Try harsher solution Y2...
- bdangubic 8d ago
  > Crime X exists -> Try solution Y ... I think the problem here might be that while Crime by its definition might be the same, the way that it is executed changes drastically so Solution Y/Y0/Y1/Y2 are not required to exist in terms of severity (very likely solution Y was severe enough if you were tried and convicted of the crime) but they are needed because the way Crime X is executed changes (especially this Crime X)
- rapatel0 7d ago
  Maybe, but you also have to recognize that organized crime is a system. Easier money laundering will necessarily incentivize and enable more crime.

cousinbryce 8d ago

The board of directors recognizes the cost savings and immediately start solving world hunger. Meanwhile a gangster in Moldova intrinsically knows that world money laundering has hit 5% GDP and decides not to.