Quote from: geotom on January 30, 2017, 04:12:29 PM

Community,

Ive recently been sent a link by a guy who was considering setting up a tumbler service for BTC but wanted my opinion on the validity of the information that he saw in the link, which could impact his business model. I didnt do much to help the guys confidence as Ive already heard similar information coming down the pipe elsewhere Norway and Sweden are already pushing legislation to consider services and nodes that facilitate coin-mixing to be treated as a form of money laundering. This seems to be potentially influenced from the Quatar conference on money laundering (listed relevant key points below).

My question is this. If this legislation is coming down the pipe, potentially in many nations, could this mean that a Dash Masternode which facilitates coin mixing also becomes illegal (in any nation using the Quatar conference recommendations as a template for AML legislation)?

If the majority of nations determine Dash Masternodes to be illegal (should not continue to be tolerated) then Dash would either have to:

a) Follow extensive KYL/AML proceedures at each point in the process of transaction, giving the appearance (if not the substance) of privacy or,
b) Dispose of the ability to conduct coinjoin mixing operations altogether and drop the privacy focussed moniker,
c) Move Masternodes to those nations that do not consider Masternodes as facilitating laundering, leading to centralisation (and a greater point of weakness

Ive seen that Amanda B has been asked on YouTube what the answer might be regarding the legality of Masternodes and private transactions, but so far they are only at the stage of liaising with legal representation to investigate the issue under current US law.

My concern is genuine because I have a modest investment in Dash and I feel that given potential new AML laws coming over the horizon, the Masternode structure could be a point of potential weakness (to legal attack). If DASH drops privacy from their transactions and follows AML/KYC more strongly in the future then I feel that a large advantage of DASH over other forms of electronic payment will have been removed.

Investigate for yourselves, any genuine, knowledgeable or well though-out responses would be appreciated.

Thanks.

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Global conference on countering money laundering and digital currencies in Doha, Qatar. The event was organised by the Working Group on Virtual Currencies, a joint initiative of the Basel Institute on Governance, Europol and Interpol, and funded by the authorities of Qatar.

At the end of the Conference, the following recommendations were agreed:

All countries are advised to regulate Digital Currencies Exchangers and Wallet Providers under their current Anti Money Laundering and Counter Terrorism Financing Legislation in line with the obligations already pending on the Financial Sector

All countries are advised to take action against Digital Currencies Mixers/Tumblers. Such services are designed exclusively to anonymize transactions and to make it impossible for Law Enforcement Agencies to detect and trace suspicious transactions. The existence of such companies should not continue to be tolerated

https://www.baselgovernance.org/news/global-conference-countering-money-laundering-and-digital-currencies

Moving ahead of issues like this Dash requested a full legal analysis by Marco Santori from Cooley LLP, one of the leading attorneys on the space.

This research has been completed and a new legal section will be added to our website soon with information. What i can advance is masternode operators are not liable for the transactions they relay or the PrivateSend feature under US law.

Edit: You can follow updates to this here https://www.dash.org/forum/threads/legal-research-marco-santori-cooley-llp.12691/