On the legality of selling certain types of accounts

SoulReaver

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Jun 6 00:22

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#1349

The intuition that account selling is legal treats it as selling an ordinary digital good. But the thing being sold is access to an account registered to someone's identity, and trafficking in that access is specifically what several criminal statutes target.
The clearest case is KYC-verified financial and exchange accounts. A verified account is one that has passed an exchange's identity checks, so the product is the ability to transact under another person's verified identity. That is not a grey area. It maps directly onto:

access-device fraud, 18 U.S.C. § 1029: trafficking in credentials usable to obtain money or services

the Computer Fraud and Abuse Act, 18 U.S.C. § 1030: the buyer has no authorization to the account at all

identity fraud, 18 U.S.C. § 1028: transacting under another person's verified identity

money laundering, 18 U.S.C. § 1956: selling KYC-cleared accounts is a recognized laundering method

In every instance, the transfer also breaks the terms of the service the account belongs to, since Coinbase, Google, eBay, and the rest all prohibit account transfer. So the activity is at minimum a violation of those parties' rights, and at the financial-account end, a fairly direct fit for criminal statutes. "Plainly legal" is not an accurate description of it.

The Terms angle
The platform's own Terms already track the same conclusion, and they do it through the "anything legal is allowed" logic rather than against it. The high-risk section does not tolerate "any good, service, or content that violates the law or legal rights of others." That clause is the inverse of the working principle: it says the legality test, applied honestly, excludes things that break the law or others' rights. Account-selling is exactly what that clause describes. So the Terms and the principle point the same direction; it is only the assumption that account-selling is legal that makes them look like they conflict.

In short
Account sales are not a clean fit for "legal, therefore allowed." The financial account variety is close to plainly illegal, the rest violate third-party rights, and the Terms already capture both through the legality test they apply. Offered simply as the argument, for whatever it is worth.

Edited: Jun 11 04:48

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AilliA

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Jun 7 15:50

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#1351

Reply to post #1349

https://xmrbazaar.com/forum/topic/271

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Camylopez

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Jun 8 02:37

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#1359

Reply to post #1349

I would argue that being legal/illegal in common law countries is a grey area (common law US, Canada, UK, australia, New Zealand.)

If the purpose is to use the account for illegal purposes, then it is illegal, if not, then its legal. So the defining criteria for legality is intent.

In all the above mentioned common law countries, and in many more around the world, the use of other peoples identities is very common in the business world. they are usually termed "nominees" to put a nicer word on it.
The reality is its the same shit, a person uses their identity as company director or to open banking facilities and accounts. Its been going on for years, and there are many regulations created to de anonomize such practises, but no laws making it outright illegal. Hence like I said, its intent that defines legality.

I would agree that the intent of many people are to do illegal shit, ive seen a few carders pop up so yes there is a high risk of criminality, which should put the onus on the vendors to prove there is no intent fro criminal activity and that they vet their clients.

As for TOS violations, that's irrelevant. its a civil matter and will get your accounts closed, but it has nothing to do with legality.

Almost anyone and company involved in the crypto world for over ten years is using nominees/mules or shell companies to process transactions. The hard part is to try and identify when they are doing illegal shit.

As an Australian, I can assure you that Australian regulators are aware of it, and are saying nothing about it rather than taking on the task of dealing with discriminatory banking practises. They don't care so long as everyone is filing their reports.

18 U.S.C. § 1029: trafficking in credentials usable to obtain money or services this applies to fraudulently attempting to gain financial access, ie theft. (from what I can understand, im no expert on US law)

Act, 18 U.S.C. § 1030. if they have been granted permission to access then does not apply

18 U.S.C. § 1028: back to my point about intent.

18 U.S.C. § 1956: again, based on intent

Notwithstanding, those are all US laws. Im not ignorant of the long arm of US regulators and the punitive actions they take, nor the smart choice to stamp out such practises. Im just posting to clarify that not everyone involved in such practises are illegal, some are, some aren't, and most likely most people on here are. There are many companies setting up companies with nominee directors and banking facilities in hing kong for around 5K usd. no one flags these as being illegal.

Edited: Jun 8 02:56

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Camylopez

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Jun 8 03:07

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#1362

Reply to post #1359

also a few nominees advertising themselves on fivrr. maybe listings on here should follow that rout to clarify and make it clear the intent isn't illegal activity.

I know in australia they usually hit up backpackers, or bring in an Indonesian or philipeno for holidays for a nominee. such people for banking rarely last a full year, so there is always a cycle going on.

Edited: Jun 8 03:09

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SoulReaver

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Jun 8 03:09

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#1363

Reply to post #1359

You're conflating whole bunch of things

A corporate nominee is a legally documented proxy who is required by law to disclose the Ultimate Beneficial Owner to the government. Buying an anonymous, pre-verified Coinbase account to hide your identity does the exact opposite. It is not a nominee structure.

Since you're from Australia, let us take a look at your laws that you (not) know so well!

Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act)

Section 139 & 140 (False Customer Name): It is a direct criminal offence (punishable by up to 2 years imprisonment) to receive a designated financial service using a false customer name or customer anonymity. By purchasing an account verified in someone else's name, the buyer is inherently operating under a false name. It does not matter what they are buying; the act of masking the identity from AUSTRAC is the crime.

Criminal Code Act 1995 (Cth)

Division 400 (Money Laundering): "intent" argument is outdated. Under recent amendments (Crimes Legislation Amendment (Economic Disruption) Act), the prosecution no longer has to prove you had the intent to commit a specific predicate crime. Recklessness or negligence in hiding the source or identity of funds via a purchased KYC account is enough to trigger a money laundering charge.

Breaking a standard TOS (like sharing a Netflix password) is usually a civil matter, but breaking a financial platform's TOS to hide your identity triggers federal computer crime laws.

1. The TOS is dictated by AML Law
Financial platforms like Coinbase don't ban account selling just to be difficult; they ban it because Australian AML/CTF laws legally require them to verify the true identity of the person operating the account. The TOS is their legal compliance mechanism. By breaking the TOS to use a purchased account, you are actively forcing the institution to unknowingly violate federal tracking laws.

2. It triggers "Unauthorised Access" Crimes
Under the Australian Commonwealth Criminal Code Act 1995 (Part 10.7), it is a federal crime to cause "unauthorised access" to restricted computer data. Who defines what access is "authorised"? The platform's Terms of Service. Because the TOS explicitly prohibits account transfers, the buyer has zero legal authorization to access the exchange's servers. The moment the buyer logs in, it ceases to be a civil dispute and becomes criminal unauthorized access.

3. Civil Breach + Financial Action = Criminal Fraud
Violating a TOS to read a news website is a civil matter. Violating a TOS to intentionally bypass a financial institution's security and identity checks to move money is fraud by deception. The TOS violation is the exact evidence prosecutors use to prove you intended to deceive the platform about your identity.

You say 'I would argue,' but you proceed to write your personal, subjective opinions, which are totally irrelevant to the intents and purposes of this topic. That's not how 'arguing' works at all! What matters is how things look under the law, and whether or not following it gets the platform taken down by the host or the domain registrar, or gets the platform owner into trouble. That is the thing that matters, not your subjective (and wrong) interpretation.

Edited: Jun 8 03:33

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Camylopez

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Jun 8 03:55

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#1364

Well, now your conflating things. there is no such thing as "government" nor any central register of "legally documented" nominees when it comes to this.

There are separate government departments who use the information for the purpose they were created for and are otherwise a vault.
IRS (ato for me) does. to disclose anything to anyone. case in point, trumps tax returns.
Fincen (austrac for me) are also likewise a vault, only releasing for law enforcement with the appropriate investigations.
if you see my post above, like I said the regulators don't give a shit so long as you file your reports. I can use random person on the street, file apropiatly and im still within the law. This goes back to intent.

You have provided a very simplistic narrative for Section 139 & 140 (False Customer Name) this is governed by division 2 or 3 or 4 of the act. customer is not bound by that unless they have a licence. the bank is, and yes this is why the bank does their best to stamp it out.

division 400 is for people involved in criminal activity, and yes I have been a participant in such investigations. your assessment would have businesses receiving payment by stolen credit cards charged.

I understand why banks and financial institutions ban accounts. If you were licensed you would know they ban accounts for tip offs, flags, reports. nearly anything that has no hard evidence of criminal activity can get an account with a bank or an exchange banned. They are in extreme dread of the act that you quoted, that they don't give it a second thought, better to lose a customer than get fined and spend 2 years in jail.

TOS no matter if they are rooted in law, are still civil, and no one is under any compulsion to disclose anything or nominees to a financial institution. The onus is on the financial institution to do their best to stamp it out, and report criminal activity, not the other way around.

In australia, this is so prevalent and mainstream to be running mule accounts, that Australian banks have partnered with a Canadian company called biocatch trust to identify all the accounts. This has actually made it worse, because more people are blacklisted and turning to use third party banking. https://www.biocatch.com/press-release/biocatch-partners-australian-banks-fraud-scams-intelligence-sharing-network

That is how "I would argue works" I would argue means im using my interpretation. otherwise I would state "it is a fact".
You would also note, I clarified that my opinion is to correct your interpretation that you put forward claiming all such things are criminal. I agreed about the long arm of regulators and that banning such services is the correct approach

Edited: Jun 8 04:17

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XmrBazaar

On the legality of selling certain types of accounts