See! This is how an innocent private enterprise becomes a security state tool. Notice that Coinbase didn’t actually do anything wrong – there was no evidence of money laundering or terrorist financing or actual criminal activity. Coinbase is being fined for letting customers open accounts “without sufficient background checks”.

The $100 million settlement requires that Coinbase invest $50 million in its compliance program. In other words, Coinbase needs to hire a lot of expensive former federal regulators to do compliance duty. This may look like a penalty, but it’s actually an induction. When a critical mass of ex-government employees occupies the corner office, only then can Coinbase become a respectable financial institution.

The “compliance program” is obviously bullshit. When a criminal wants to launder stolen crypto, they don’t go to the hassle of opening a new Coinbase account. They borrow a hacked account, or buy one off the dark web, and launder the proceeds through a victim. The unwitting money mule is as old as advance fee fraud.

Speaking of hacked accounts, here’s Michael Terpin suing AT&T because a 15-year-old kid stole his phone number in a SIM swap. The teen used the number to access Terpin’s email where Terpin’s private keys were saved, and swiped $24 million worth of shitcoins.

This is not uncommon; last year there were 28 lawsuits filed against mobile service providers for enabling SIM-swap attacks on crypto accounts. In most cases, hackers bribed retail employees to override security measures and hijack the SIM account.

I’m generally unsympathetic to people who secure their crypto with a cell phone, but I do wonder — How come AT&T never gets in trouble for facilitating money laundering?

They already have very good compliance, that’s why.