The Bank Secrecy Act is a Cruel Joke

Elizabeth Warren goes mask off; also JSTOR's evil, 23andMe hacked, and Blake Butler's "Molly".

I’ve been travelling, so today’s roundup is a bit condensed. It’s been a big week for inept, rent-seeking miscreants pretending to be good guys.

TW: Two topics touching on suicide.

• Elizabeth Warren is Covering for Elite Financial Crime

• The SEC Lied to Shut Down Debt Box Without a Trial

• JSTOR is a Fraudulent Operation Built on Evil to Further the Destruction of Knowledge

• 23andMe Lost Your Genetic Information

• Books: Blake Butler’s “Molly” isn’t for normies

Elizabeth Warren is Covering for Elite Financial Crime

Much ink has already been spilled about Jamie Dimon’s new round of silly, performative criticisms of crypto - he said that “if I was the government, I’d close it down.”

But who cares. Jamie Dimon is a broken record who fundamentally doesn’t mean anything he says - if you’re the CEO of JPM, every word out of your mouth is tactical. What’s really shocking is that Senator Elizabeth Warren was his eager questioner.

Warren teaming up with Dimon to bash crypto is an embarrassing and ludicrous bit of hypocrisy, for two related reasons. First, JPMorgan itself is a money-laundering powerhouse that has spent decades as a happy facilitator of all sorts of major financial crime worldwide - for instance, it recently stood accused of helping a former minister steal nearly $1 billion from Nigeria.

And second, Warren is teaming up with Dimon to plug the expansion of the Bank Secrecy Act, a fundamentally broken enforcement tool that effectively gives banks permission to profit from financial crime.

Let’s repeat that: The Bank Secrecy Act doesn’t stop elite financial crime - IT LEGALIZES IT.

Rather than worrying about the expropriation of taxpayer funds at scale by global kleptocrats, Elizabeth Warren has recently become obsessed with shutting down the comparatively petty crimes that might be facilitated by blockchains and cryptocurrency (to be clear, this does not currently occur at meaningful scale). Warren’s current bill would compel crypto services to (somehow) comply with the BSA.

But the BSA is not an actual anti-money laundering tool - it’s a way for banks to cover their asses while continuing to facilitate crime. And by pointing to it as some standard of good compliance, Elizabeth Warren is cosigning one of the most broken parts of our financial enforcement system.

It works like this: If they see what they deem suspicious activity, a bank files something called a Suspicious Activity Report. Then they do nothing. But because they filed the SAR, they’re legally protected if the transaction turns out to be, say, a payment to a drug cartel. This perverse system provides no incentive to actually stop criminal payments.

In 2021, I talked about this with Gary Shiffman, PhD, then-CEO of a machine learning anti-money laundering startup called Consilient.

“It turns out 90% or more of those [suspicious activity] alerts are wrong,” Shiffman told me. “And any criminal worth his salt knows those rules and doesn’t get caught.”

The entire thing, Shiffman explained, is kabuki. Results don’t actually matter. Here is his HFSC testimony to that effect from 2019. Worth a read.

“The default over the last 20 years has just been measuring the amount of data sent. Every year I’m sending more [SARS]. We’re like hamsters on that wheel, we’re just running in a circle, but we’re not catching anything.”

And there is no effort to improve, according to Shiffman:

“There is no critical review of the data. We should be measuring how many criminals we’re catching ... We don’t measure that. We measure how many reports were filed.”

On top of that, banks aren’t even the real venue where the rich and corrupt hide their wealth - their bank accounts are usually obscured beneath many layers of shell companies. This piece of mine following the release of the Pandora Papers goes into that dynamic in some depth.

So yeah, Elizabeth Warren, who was able to pretend to be in favor of the little guy by campaigning for “fair” finance, is in reality either a dangerously ignorant clown, or an active opp intented to interfere with real reform that would take power from elites.

JSTOR is a Fraudulent Operation Built on Evil to Further the Destruction of Knowledge

This week JSTOR, a nonprofit entity that should not exist, has been back on the radar of digital justice advocates.

JSTOR is effectively a government-granted monopoly that chokes off the global distribution of knowledge. It charges exorbitant rates for storing and distributing academic research produced and published with taxpayer money. But even if you have legal access, they might come after you!

That’s what happened when a student named Aaron Swartz downloaded large numbers of JSTOR-controlled files *from an account that had permission to do so*. JSTOR’s complaint against Swartz led to a criminal prosecution. Fearing what might come next, Swartz ultimately killed himself.

That any human would be driven to suicide for downloading files is a travesty. But the truly horrific irony here is that Swarz did more in his short life to promote the distribution of knowledge than anyone within miles of JSTOR’s offices ever has. Swarz, you see, was also one of the creators of RSS, the feed technology that is still used to distribute things like podcasts - mostly for free.

Do not support JSTOR. If you can, steal something from them today in memory of Aaron Swarz. And read more about Alexandra Elbakyan and Sci.Hub here.

The SEC Lied to Shut Down Debt Box Without a Trial

A Utah judge has claimed the U.S. Securities and Exchange Commission misrepresented facts in its application for a preliminary injunction to freeze assets of Debt Box, a crypto project. This is not a matter of false evidence being presented at trial, which would be bad enough - the judge claims the SEC lied in its application for a pre-trial asset freeze injunction.

This is part of a much larger pattern of derangement at the agency when it comes to anything remotely crypto-related.

23andMe Lost Your Genes in the Wash

23andMe has admitted that hackers exfiltrated the genetic information of 7 million people. At least according to the Guardian, this doesn’t include actual gene data, thank god - but does apparently include family tree data, ethnic background, location, and other very sensitive data points. One large pool of data supposedly included 1 million “Ashkenazi Jews,” which is obviously terrifying.

Several outlets have tried to frame this as an issue with password re-use, because the hack was apparently a simple matter of credential stuffing. But a platform like 23andMe can’t simply blame its users for setting up weak security protocols.

Blake Butler’s “Molly” Out Now

Blake Butler is likely one of the most important writers working today. His book 300,000,000 is particularly transcendent and innovative. He has a new book out this week, “Molly,” a memoir about his short relationship with the deeply troubled poet Molly Brodak.

“Molly” is apparently already generating controversy for its retelling of Brodak’s mental troubles and ultimate suicide. I don’t have the book yet, and I haven’t actually laid eyes on the grousing of what I presume are a bunch of dimwitted anti-art moralists.

Their discomfort - and their eagerness to condemn someone using art to work through a direct, torturous experience - should be all the reason you need to pick up the book and engage with it on its own terms.