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Surveillance Finance 101 with Seth Hertlein and Michael Mosier

Sep 12, 2023

Seth Hertlein and Michael Mosier explain how the modern financial surveillance apparatus works, discussing terms like FATF, FinCEN, AML/KYC, and OFAC. They explore the history of financial surveillance in the US, including the implementation of the Bank Secrecy Act in 1970 and the expansion of surveillance after 9/11. The speakers also highlight the importance of protecting American values and discuss the growth of unchecked surveillance.

01:23:28

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Episode guests

Seth Hertlein

Michael Mosier

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Episode notes

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Quick takeaways

Financial surveillance in the US has gradually expanded over time, encroaching into people's lives and imposing reporting obligations on intermediaries and individuals.

The podcast highlights the key agencies involved in enforcing financial surveillance regulations, including FinCEN and OFAC, and emphasizes the challenge of balancing information dissemination with protecting individuals and ensuring appropriateness of information sharing with foreign governments.

Deep dives

Expansion of Financial Surveillance

The podcast episode explores the history and expansion of the financial surveillance apparatus in the US. It begins with the Bank Secrecy Act of 1970, enacted to combat organized crime and money laundering. Over time, with legislative updates and the Patriot Act after 9/11, the apparatus grew encompassing more reporting requirements and agencies. The episode highlights that financial surveillance has gradually encroached into people's lives, with intermediaries being responsible for reporting transactions, and individuals also having reporting obligations based on their specific situations.

Introduction

2min

Understanding the Financial Surveillance System and Protecting American Values

2min

The Importance of American Values and the Growth of Unchecked Surveillance

3min

Understanding Financial Surveillance: A 101-Level Overview

2min

Surveillance Finance and Government Tracking

8min

The History of Financial Surveillance in the US

13min

Seth Hertlein, VP Global Head of Policy at Ledger, and Michael Mosier, Co-Fouder of legal boutique Arktourous, Build Exante - FinCEN, Treasury, and Chief Technical Counsel at Chainalysis join us on today’s show to explain the modern financial surveillance apparatus. FATF, FinCEN, AML/KYC, OFAC...the blacklists, the greylists. How does it all work? Who makes the rules?

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----- TIMESTAMPS

0:00 Intro 9:10 Financial Surveillance 13:10 Data Collection 17:10 The Bank Secrecy Act 20:30 SARS 23:10 Understanding the Enforcers 30:30 Goals for FINCEN 38:55 OFAC Explained 51:11 Strict Liability 56:26 Process of Getting OFAC SDN List 1:00:50 Tornado Cash 1:11:05 What Should We Do? 1:21:05 Closing & Disclaimers

----- RESOURCES

Michael Mosier https://twitter.com/m_mosier_

Seth Hertlein https://twitter.com/SethHertlein

----- Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures ⁠