There is a new thread on Namepros that may have taken the new gtld discussion to another level, a weird level. Although anything is possible it is the Internet.
Namepros member GarpTrader posted:
How new TLDs could be used to launder drug trafficking proceeds
One-word and hyper short LL .Com domains are rare and already in the hands of well-established domainers or corporations. Such domains are expensive and their sale even if private is more likely to draw attention. However , the release of hundreds of new extensions has made the acquisition of premium keywords, short numeric, LL and Chinese premiums much easier – in some TLDs. Following is a potential scenario…
A drug dealer in the U.S. sells $1 million of illegal drugs. The proceeds are deposited in small transactions into a series of related bank accounts. They could be linked to separate PayPal accounts but that might not be necessary. An affiliated partner in a foreign country (source of drugs) registers 250 cheap new TLDs at $1 each. The U.S. based partner buys the 250 new TLD domains in separate transactions over a period of days for an average price of $4000 each but under limits which might attract the attention of authorities (suspicious activity reports have $5k to $10k triggers). The domains are transferred to the U.S. partner while a series of small transfers from numerous bank accounts and or PayPal accounts totaling about $1 million less transfer fees is laundered out of the country. Yes .Com domains could be used but it is much harder to find good combinations in .Com.
Theoretically these same domains could be sold back to the original seller for $1 each so that the process could be repeated with the same domains.
This same method could be used to launder human trafficking proceeds or to fund terrorist activities. Yes this is all hypothetical but we have already seen buyouts in certain domain categories and TLDs. The Chinese are huge players in the new TLD space. Why?
It’s not the first time I have heard money laundering and domain names in the same sentence. I remember one time someone emailed me about 5 years ago, he told me he had better names than what sold on Sedo every week so he figured anything not super premium was money laundering.
The popcorn is a popping as we speak.
The huge amount of capital flight out of China is definitely not a conspiracy theory. It’s a widely accepted fact in the financial world, acknowledged by the Chinese government who are trying to stem the flow.
It’s safe to assume that the reason the vast majority of new gTLDs are Chinese-owned is because they’ve been purchased with illegally moved money.
A lot of money is moved out of China from Chinese nationals that don’t trust their government. I think the conspiracy mention was how the guy from namepros talked about moving drug money. I wonder what the market for tin foil hats is currently at ?
To quote the author, “It’s not the first time I have heard money laundering and domain names in the same sentence”. It’s clear from his comments that he believes domains aren’t used for money laundering, hence his statement about conspiracies jumping the shark and that this discussion is taking it to a “weird level”.
In fact, there’s a high likelihood that most of the Chinese demand for new gTLDs, and short .COMs is driven by money laundering. I’m surprised there are people out there who don’t know that. The Chinese capital flight has been in all the major finance news for a couple of years, and there’s not particularly any reason to believe it wouldn’t include domains. When you step back, there’s almost no other reason to explain the sudden interest in domains from China, even if you want to call the timing a coincidence.
That people would use the same techniques for laundering drug money, or money from any other illegal activity, is hardly a huge leap of logic.
Raymond Hackney says
The article reference the post on Namepros, the op there did not say China, he talked about drug money and he spoke of an American drug dealer. At the end he included China.
When people have mentioned money laundering to me it was not about Chinese getting money out of China. Of course domains can be used for money laundering.The people who have yelled that to me They could not believe there names were selling and other people’s were, it was a grasp at straws to justify why they were not getting wealthy selling their domain names.
The post on Np is just looney tunes at least the members there are getting a good laugh.
I think tin foil hats are $5.
So, if we’re agreed that Chinese money laundering is taking place in the new gTLDs, I can’t see any reason why organized criminals in other countries aren’t doing the same thing. Why would geography or the type of crime be a differentiating factor?
That was hysterical, thx.
I would think American drug dealers would use Bitcoin over a new gtlds, do American drug dealers know of new gtlds.
And here is the stupidity of the namepros post, why would it be about new gtlds ? Why single them out, you could do it with .com or .net or .info. It’s just the .com posse trying to put down the new gtlds.
The real reality says
Obviously btc would be easier much easier. David walker played out a better scenario.
Here’s the thing I want to know…do these people have anything better to do with their time ? Or is it time for meds.
Raymond Hackney says
@Reality that’s a valid point, I think it’s how the post came about, it was not rooted in that he uncovered something, it was just put out there like an episode of NCIS or Laundry She Wrote.
fred krueger says
this makes no sense.
why can’t a potential money launderer just buy any number of .com names from a counterpart at inflated prices — thereby transferring money? Or for that matter, why not just buy a rare coin on ebay?
on a separate note, if there was no annual holding cost for these names, ie: if they were sold “forever” they would make much more attractive investments. Now that ICANN is flush from GTLD auction proceeds, they should terminate the yearly per domain fees and make it a one time thing.