Silk Road Investigator: Existing System Doing a “Terrible Job” of Preventing Money Laundering “When 99% Crimes Go Unprosecuted”
Kathryn Haun, a general partner at US venture capital firm Andreessen Horowitz and the Justice Department's prosecutor for the Silk Road case when she was working for the Attorney General's office appeared in an interview with Kyle Bass, the host of Real Vision Classics.
Back in 2012, she witnessed the take down of the Silk Road which was the first time she’d ever heard of bitcoin. Seven years ago, she was asked to look into shutting it down but quickly decided that the digital asset wasn’t what needed probing.
During this recent interview, Haun spoke about her role during the prosecution of the dark web marketplace. The case actually, she recalls got opened after Senator Chuck Schumer read about it in an article.
From the FBI, CIA, Secret Service, DEA, ATF, US Marshals to undercover agents that befriended the person running the Silk Road, different alphabet agencies made up the government's task force.
2013, she said was a bad year for Silk Road when while an online persona called “Death from Above” had started extorting DPR, another online persona called ‘French Maid’ was selling DPR information about the government's investigation.
At the same time, about 21,000 BTC (roughly $150 million) went missing overnight from the Silk Road.
Former Silk Road investigator Kathryn Haun discusses the investigation with Hayman Capital founder Kyle Bass.
Earlier this month, she said the attempt to shut down Bitcoin was useless as it would be “akin to saying ‘let’s go prosecute cash.'”
And now the same criticisms are being faced by Facebook’s Libra.
“I think it would be a really dangerous thing, and frankly a dangerous precedent to start shutting down technology before it’s built,”
In the traditional financial sector, “99.9% of all money laundering crimes go unprosecuted,” she told Bass stating, that the current system is doing a “terrible job” of preventing the concerns over the anti-money laundering (AML).
This is despite the financial services industry spending $20 billion a year on AML and KYC. “I don’t think it’s working,” said Huan.
And moving to a centralized system when it comes to AML, she thinks “we’re kidding ourselves if we think that’s going to change too much.”
More so because centralized financial systems provide governments with higher leverage in areas of bad sovereign actors. Cryptocurrency, on the other hand, can diminish this power.