Thursday, May 30, 2024

should banks be crime fighters, gold smuggling, BTC on the NYSE

“We cannot separate the air that chokes from the air upon which wings beat.” – John Perry Barlow  ||

Hi all! I want to take a moment to thank all of you, from the bottom of my heart, for subscribing to this newsletter – I love what I do, and you make me feel it is worthwhile. For that, I am grateful.

Today’s email has a different format, as I went down a rabbit hole of how ridiculous the current system of AML rules is and ended up using pretty much all of the allotted space. I’m all for crime prevention – but dampening activity and opportunity by debanking even the innocent is not the way to go about it.

 If you find this newsletter useful, would you mind sharing it with your friends and colleagues? ❤

IN THIS NEWSLETTER:

• Should banks be crime fighters? The hidden (and not so hidden) costs.

• BTC on the NYSE

• Gold smuggling

If you’re not a subscriber to the premium daily, I hope you’ll consider becoming one! You’ll get ~daily insight into the growing overlap between the crypto and macro landscapes, as well as some useful links. And there’s a free trial!

WHAT I’M WATCHING:

Should banks be crime fighters? The hidden (and not so hidden) costs

“We are all Nigels now.”

That was former chief economist for the Bank of England Andy Haldane speaking at an event earlier this month. He was referring to the closure last year of right-wing politician Nigel Farage’s account at upscale bank Coutts, for what Farage insisted were political reasons. In the resulting fuss, the bank’s CEO lost her job, Farage got an apology, and we all breathed a sigh of relief that we weren’t in his shoes (for many reasons besides the bank issues, I imagine).

There’s a strong chance we will be, however, at least in terms of banking struggles. Haldane was talking about his experience of being denied a bank account. Yes, a well-respected former high-ranking official of the UK’s bank regulator was not an acceptable bank customer. The reason given was that he was “politically connected”. It may be puzzling why that would be a problem, but the bank in question (any bank, really) had reasons that are both reasonable and nonsensical at the same time.

The “reasonable” part comes from simple business economics. The “nonsensical” part is from rules that prevent banks from doing banking business, because of a “guilty until proven innocent” preference for prevention over freedom.