An interesting article from today's National Post about the highest denomination note in the western world (apparently). One of the commentators suggests that most criminals use wire transfers (EFTs). I wonder if this is in fact the case, and whether a move to abolish higher denomination notes would have a positive effect on reducing criminal activity? I know that the casino industry in Canada is taking steps to try and reduce its reliance on cash for this very reason.
http://news.nationalpost.com/2012/11/15/the-hunt-for-canadas-1000-bills-there-are-nearly-a-million-left-most-in-the-hands-of-criminal-elites/
I fear that I am missing something — what is the significance of the denomination of paper money to electronic transfers?
ReplyDeleteThe article suggests that criminals prefer dealing in the highest denomination possible paper bills (less to carry) hence the fact the most of the $1000 bills in Canada are supposed to now be in the hands of criminal elites. The immediate relationship is between high denomination bills and criminals.
ReplyDeleteNow, what does this have to do with electronic transfers? Simply that someone suggested that getting rid of the bills would not make much difference because criminals nowadays use electronic transfers. I doubted that and wondered if anyone else had any insights. For example, has anyone studied what percentage of the world's electronic payments are for illegal things? How big is the 'underground' epayment industry?
Ah - I'm with you - interesting.
ReplyDeleteI had an interesting conversation with the GSMA last week about the distribution of indecent images of children, and the mechanisms for paying for these images, rather than just exchanging them. Although early in the research phase, it seemed that electronic, and mobile in particular, payment mechanisms needed closer examination. I talked a bit about non-traditional payment infrastructures, such as in-world/online gaming payment systems, which allow the conversion of real world money to in-world money, where it can be exchanged for digital items; although a clear legitimate use, the possibilities for misuse seem reasonably significant to me.
I've been pondering the same thing lately, although in relation to gambling (I work for a Lottery Corporation) Namely, could you have a lottery in which people pay real money for a chance to win "virtual" currency? In principle it seems fairly easy; the critical question is how would this be regulated and policed? Are you aware of any sites that are currently doing something along these lines?
DeleteDavid
ReplyDelete> could you have a lottery in which people pay real money for a chance to win "virtual" currency?
It's an interesting idea, particularly if pitched at those who already engage in a particular virtual world; there may also be scope in partnering with a company behind a virtual world, as a way of driving traffic toward the site — every entrant gets a small amount of credit, with lottery winners getting a lot of credit (which is, perhaps, easily exportable?)?
I cannot see an obvious reason why not, although I say that without having looked at the Gambling Act 2005 for a couple of years now.
There is perhaps an interesting question whether the model you propose is in fact a lottery, on the grounds that a lottery requires a prize consisting of money, services and goods, and it's questionable into which, if any, of these a prize of "virtual currency" falls. That being said, the spirit of lottery regulation is quite clear, and I can't see a fundamental reason why this would not be treated in the same way as any other lottery.
Very happy to discuss it further, as it sounds interesting!
>There is perhaps an interesting question whether the model you propose is in fact a lottery, on the grounds that a lottery requires a prize consisting of money, services and goods, and it's questionable into which, if any, of these a prize of "virtual currency" falls
DeleteInteresting. Is "money" defined somewhere as "legal tender"? If not, there may be an argument that it is still "money" as it serves the same purpose in a virtual world as "real" money serves in the "real" world.
In Canada (which is where I live), I think it is fairly likely that this proposal would constitute a lottery. The definition of a "lottery scheme" is set out in s. 206 of the Criminal Code, and it includes, inter alia:
(d) ... any scheme, contrivance or operation of any kind for the purpose of determining who, or the holders of what lots, tickets, numbers or chances, are the winners of any property so proposed to be advanced, lent, given, sold or disposed of;
"Any property" seems broad enough to me to capture virtual currency.
In terms of gaming, "prize" means "money or money's worth," which is rather different to the definition of "prize" in the context of a lottery, which is "any money, articles or services." The distinction may be historic, but there may be something to say that this requires a narrower interpretation of "money."
DeleteOn a quick flick through the legislation, I was not able to find a definition of "money," but it may be that I simply overlooked it somewhere. The Gambling Act has just over 360 sections, and I've certainly never read it all! It's here if you wanted to see it, though.
A point to note though is that the definition of prize "includes" these things — there's a good argument in terms of statutory interpretation that this was designed to be a non-exhaustive definition. This would, to my mind, support my understanding of the public policy behind the legislation, which is that, if something feels like a lottery, it should be regulated like a lottery, and that using a "virtual currency" rather than "money" should not circumvent the policy objective.
"Any property" seems broad enough to me to capture virtual currency.
Now that *is* an interesting one. Does a "virtual currency" have the traits which make it "property." Under English law, the concept of "property" is a rather confusing one, I often think, and is somewhat circular in nature — something cannot be property unless it is capable of being owned, and, of course, one cannot own something unless it is capable of being property.
This is not a particularly new issue; there's a fair amount written on whether "virtual property" is "property" for the purposes of the law. I have not yet read an analysis which I find completely satisfactory, probably because I come with a slight bias against the extension of property rights, particularly in terms of "intellectual property." I can understand the notion of assignment of copyright in a digital representation of a sword, and indeed the licensing of such an asset, but I still struggle with the notion of theft in such an environment — I cannot, to my mind, steal your digital sword, but my actions may amount to an infringement of copyright owned by the author of that sword.
In the case of "virtual currency" here, I'd probably start looking at much the same as I would with virtual property — at the terms which govern a user's relationship with the service provider. Do these terms affect how the law should treat the property / currency.
If the currency is convertible, into and out of real world currency, I can certainly see how it should be treated as money; if it cannot be brought out of the game again, perhaps it is less close, but is it much different to store vouchers, or a pre-payment card for a mobile phone?