this post was submitted on 03 Mar 2025
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Buying a $250 Residency Card From a Tropical Island Let Me Bypass U.S. Crypto Laws (www.404media.co)
submitted 23 hours ago by misk@sopuli.xyz to c/technology@lemmy.world
44 comments fedilink hide all child comments
 

Mirror: https://archive.is/2025.03.03-150311/https://www.404media.co/buying-a-250-residency-card-from-a-tropical-island-let-me-bypass-u-s-crypto-laws/

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[–] outbakes9510@piefed.social 5 points 7 hours ago* (last edited 7 hours ago)

I don't know who would benefit from interacting with this.

Going from a Kraken fee of 0.16% to a Binance fee of 0.075% after discounts (while assuming that depositing money one has in a bank account will still work well and that there is no risk from legal liability or of an account being closed) would let one recoup a $250 fee after trading a value of at least $294,117 ($250/((0.16-0.075)/100)). If one is Canadian and would otherwise have to suffer a 0.5% fee, one could recoup a USD 250 fee after trading a value of at least USD 58,823.

Someone that has about $300,000 in a bank account that wanted to use all of it to buy cryptocurrency would probably be able to afford to become a citizen of Saint Kitts and Nevis or Saint Lucia or even Malta, so Palau is probably not actually targeting rich people.

Someone that is making about $300,000 worth of trades but isn't rich is someone who trades a small value many times each year, and "the vast majority of day traders lose money". This suggests that, for most people, this will be the final meaningful purchase they make before their net worth declines rapidly. However, anyone that does end up profiting might be inclined to spend more money in Palau (whereas people who go broke won't even be able to afford to stay in Palau and so probably won't be able to cause problems in Palau), so Palau might end up profiting from people who lose money and people who gain money.

I happen to have been asked about this many months ago, since at least one person was visiting cryptocurrency meetup events in order to advertise this "residency card".

[–] fpslem@lemmy.world 85 points 20 hours ago (3 children)

It's just grift all the way down with crypto, isn't it? Scams layered on scams layered on scams.

[–] Maggoty@lemmy.world 8 points 17 hours ago

Yup. They have the exchange operators on record saying they actively trade against their customers. It's a club and if you're not in it you don't get to win.

[–] shortwavesurfer@lemmy.zip 18 points 20 hours ago (3 children)

I'd say you're right for 99% of it, but there is 1% that's genuinely useful.

[–] fpslem@lemmy.world 14 points 19 hours ago (1 children)

That's probably a fair assessment, but still a rather damning indictment of the industry writ large.

There are definitely better versions of cryptocurrency that I think could be more useful, but the industry is definitely not headed in that direction. Instead, it's all pump-and-dumps, rug-pulls, and other schemes that render them nothing more than highly speculative asset classes in which the underlying asset has no intrinsic value.

[–] shortwavesurfer@lemmy.zip 5 points 19 hours ago (1 children)

That's true. And personally, I stay away from all of that mess. And anybody I introduce, I take great pains to explain why I stay away from all that mess. But if they want to make their own mistakes, then that's on them.

[–] sugar_in_your_tea@sh.itjust.works 2 points 13 hours ago

Yup. There are a handful of useful coins, and a handful of legit exchanges. Hold your own keys in FOSS wallets, keep backups of your keys, and don't expect to get rich quick (and instead find a use outside of investing). Do that, and you should be fine.

I'm super interested in privacy coins like Monero, so I go out of my way to find merchants that accept it. It's reasonably stable, has very low transaction fees, and it's fairly popular among privacy advocates, so I doubt it'll go away anytime soon. That said, I only keep what I'll spend, so make a couple hundred at a time.

[–] Evotech@lemmy.world 2 points 17 hours ago

More like 0.01

[–] BakerBagel@midwest.social 1 points 19 hours ago (2 children)

Please elaborate on what this magical 1% that you feel is useful and worth expending the same amount if energy as Australia

[–] jdeath@lemm.ee 16 points 18 hours ago

drugs of course. i thought everyone had heard of it already!

[–] shortwavesurfer@lemmy.zip 4 points 19 hours ago (2 children)

My first question to you would be, how much energy does the banking sector use to run bank branches, haul physical money back and forth, bring employees to and from work, etc?

Next, not all blockchains require extreme levels of computation power for proof of work. Take Monero, for example, which deliberately makes ASIC chips impossible to use and is therefore mined only on CPUs, which are extremely common.

[–] ayaya@lemdro.id 9 points 19 hours ago* (last edited 19 hours ago) (1 children)

Or any proof of stake coin like Ethereum, which doesn't require any mining at all. The electricity argument is extremely out of date for most coins besides Bitcoin itself.

As far as I know GPU mining is pretty much completely dead because after Ethereum switched the yields on everything else tanked.

[–] shortwavesurfer@lemmy.zip 4 points 19 hours ago (1 children)

To be fair I'm not a huge fan of pure proof of stake because it makes validation more difficult because you have to have code for slashing somebody's stake if they are malicious or bad and a malicious entity could just buy up a bunch of your tokens and tank them. Admittedly, not a lot of people would do so, but I could totally see a government buying up a bunch of tokens on a network and purposely crashing the network in order to rid themselves of a nuisance and calling it justified. Proof of work makes that much more difficult. Still doable for certain, but much, much more difficult.

[–] NotMyOldRedditName@lemmy.world 4 points 17 hours ago* (last edited 16 hours ago) (1 children)

So a government is going to spend hundreds of billions of dollars to get enough Ethereum to disrupt it, before accounting for the price going up by purchasing hundreds of billions of dollars of Ethereum, and then they're going to destroy the hundreds of billions of dollars they invested to take the network down, temporarily. Like sure, it's possible, but once established, it's not happening.

It would be more cost effective to do a supply chain attack and introduce exploits/weaknesses to try and make people doubt using it, attack the infrastructure and steal coins from exchanges and other off chain services or smart contracts with bugs, and pass laws to restrict it.

edit: Oh and there's also the queue to activate a valid staker. It will take a lot of time to even begin to be able to do this, instead of hoarding/renting asic hardware and turning it on out of the blue.

Edit: Sorry I'm also wrong, it's 66% of staked ETH, it's not half the market cap. So we'd be talking probably upwards of a hundred billion (not hundreds) by the time we account for price increases from having to buy to even start to initiate the attack.

Edit: I also wonder if the future change to allow a staker to stake up to 2048 eth instead of 32 could quicken the attack (as it's 1 validator in the queue instead of 64) or if they'll delay larger validators longer, maybe based on its eth amount? I'm not up to speed on that. But in theory the queue would be 64 times quicker if they can join as quick.

[–] SaltySalamander@fedia.io 3 points 13 hours ago (1 children)

Ethereum could literally roll back their chain to negate the attack, anyway. They've done it before.

[–] NotMyOldRedditName@lemmy.world 1 points 13 hours ago* (last edited 13 hours ago)

Whats also likely is people see the attack coming due to the large validator queue, and they implement some sort of counter measure before the attack can even happen. Unless they let a 2048 eth validator in as quickly as a 32 eth validator, were talking many many months as there's a massive influx of validators.

Imagine buying all that eth, and the community seeing the attack coming in advance, and instead saying, were going to lock out new validators after XYZ date, and force them to exit instead.

It would cause problems no doubt, but there would be a lot of options before an attack and after if they get that far to address it.

edit: They could also dramatically reduce the allowed validators per day if it was suspected, making the attack take years to even be possible.

[–] BakerBagel@midwest.social 4 points 19 hours ago (2 children)

So you don't have an actual use cases then.

[–] Revan343@lemmy.ca 2 points 8 hours ago

Well the use case for monero is usually buying drugs on the internet. As long as the war on drugs continues, it'll be useful for that

[–] shortwavesurfer@lemmy.zip 2 points 19 hours ago (1 children)

Money of course. I have been paying my bills with crypto since 2023.

[–] BakerBagel@midwest.social 1 points 18 hours ago (2 children)

And i have been using my bank account and cash to pay all my bills since i have had bills to pay. What's the advantage of using something that is less convenient, less secure, and more resource intense than a normal checking account with direct deposit? You keep dodging the question on what use cases you think crypto currencies have an advantage over fiat currency.

[–] shortwavesurfer@lemmy.zip 3 points 18 hours ago (2 children)

Fiat currencies are money by decree of a government. If you have lost trust in your government or your government is not trustworthy to begin with, then the Fiat currency is not worth the paper it's printed on or the digits in your bank account. Your access to your bank account can be restricted at any time for any reason with just a simple push of a button and you have extremely small or no recourse to such an action. Cash is better in that regard, but even so your government or central bank purposely says they want to devalue your cash and other currency by a set target per year. Therefore making you have to work harder or become poorer. As an example, the U.S. Federal Reserve targets a 2% inflation target per year, which means if you put a $100 bill under your mattress today, in 2035, it would only buy you $80 worth of goods. I'm not that old, and yet, when I was a young kid, a $500,000 nest egg would work extremely well for a good retirement. Now, that is absolutely not the case. Not because of the goods getting more expensive, but because of the currency depreciating in value as you work for it.

[–] BakerBagel@midwest.social 1 points 18 hours ago

A small bit of inflation encourages people to spend their money and keep the economy moving. Because if your currency is going to be worth more tomorrow than it is today, your incentive is to hoard it and mever soend a dime unless absolutely necessary.

Way more people have lost everything because where they keep their cryptocurrency went under than their bank freezing their accounts. Banks only close your account if they suspect you are doing highly illegal and fraudulent stuff. And of i forget my credentials, my bank has a process where i can access my money again after 5 minutes of KYC. If someone DOES fraudulently access my account without my authorization, the bank will fully restore my account and go after the fraudster.

I dont trust the US goverment any more than you do, but Uncle Sam isn't interested in what his greenbacks are worth compared to other currencies. All he cares about is that i pay my taxes in USD.

You posted all that text, and still haven't given an actual example of where cryptocurrency out performs USD for someone just going about their daily life.

[–] mosscap@slrpnk.net 0 points 18 hours ago (1 children)

I trust governments with fiat currency a hell of a lot more than I trust anything that has to do with crypto.

[–] shortwavesurfer@lemmy.zip 1 points 18 hours ago* (last edited 18 hours ago) (2 children)

Ah, okay. See, we are exactly the opposite in that case, because I have lost all faith in governments, and therefore have lost all faith in what they call money.

Edit: Tap the Publish button before I'm into.

You could give me a bunch of government fiat, and I would take it and turn it into crypto simply to have more crypto because there are still people who desire to have government fiat currency. And I am not one of them.

[–] ALiteralCabbage@feddit.uk 2 points 18 hours ago (1 children)

I understand the inflation argument, but what gives crypto any value other than a) a relative value which is based on fiat currency anyway and b) the faith of the userbase in it?

[–] shortwavesurfer@lemmy.zip 1 points 17 hours ago

What gives any currency any value other than human belief in it? After all, when fiat currencies become valueless, we as humans end up back at gold, which has been in use for millennia.

[–] mosscap@slrpnk.net 1 points 18 hours ago

I'm not saying that governments are the most trustworthy institutions in the world, but as someone who tried to be an early adopter of blockchain from both a tech and a financial perspective, I immediately assume that anything that has the word "crypto" in it is deeply flawed and inherently untrustworthy. I've unfortunately learned this from experience.

[–] nomy@lemmy.zip 0 points 18 hours ago (1 children)

And you keep demanding a use-case like the other commenter is proselytizing.

If were just going to ask people questions they have no responsibility to answer: Do you know why BTC was developed?

[–] BakerBagel@midwest.social 3 points 18 hours ago (2 children)

I'd say you're right for 99% of it, but there is 1% that's genuinely useful.

I asked what that 1% of useful applications are and he gave a whole dog and pony show to avoid giving any examples. He said that there are times where cryptocurrency is better than your government's currency (assuming you are in a stable country with a stable currency).

Bitcoin was developed by dudes upset by the 2008 financial crash who wanted to be the ones on top the next time everything imploded. Bitcoin is 100% useless at anything other than speculation.

[–] nomy@lemmy.zip 3 points 17 hours ago (1 children)

Bitcoin is 100% useless at anything other than speculation.

And buying drugs online.

[–] BakerBagel@midwest.social 0 points 17 hours ago* (last edited 16 hours ago)

I just know where to buy the drugs i want here in town, and then i offer cold hard cash that can't be traced back to me, even if the dealer rats me out. Much safer and more secure than buying them online.

Yobs like this always come out the woodwork when Bitcoin hits an all time high, talking about how cryptocurrency isn't all bad, but once you push them it's the same tired old talking points. They don't want to help you financially. They just want you to hold their bag while they cash out.

Edit: if you are familiar with the Alt-Right Playbook series by Innuendo Studios, Crypto Bros use the exact same strategies he points out. That's why it shouldn't surprise anyone that crypto firms were the largest donors to Republican campaigns this election season. Just something to think about as people keep espousing how crypto is gonna change the world...

[–] sugar_in_your_tea@sh.itjust.works 0 points 13 hours ago* (last edited 13 hours ago)

he gave a whole dog and pony show

No, they responded to your argument that crypto uses tons of electricity, and responded that the one they use, Monero, doesn't do that. Then later responded and said they pay bills with it.

What more do you want?

There are a number of services that take crypto, such as:

  • some merch sites, like https://based.win/
  • VPN providers like Mullvad
  • donations like Tuta

Btw, all of those take Monero. If you look, you'll find more.

[–] dantheclamman@lemmy.world 47 points 19 hours ago (1 children)

The existence of everyday Palauans is threatened by climate change (sea level rise, coral reef death, heightened typhoon intensity), which is being accelerated by the energy use of proof-of-work coins. Sad to see the Palauan government sell out their own people

[–] HasturInYellow@lemmy.world 17 points 14 hours ago (1 children)

It's a bit strong to call it selling out. They are fucked already. Like their entire country will likely have to evacuate within the century. I'm not certain about this country but others are building a gov fund to help pay for that. Anything to help really. It's not like this is the thing that is going to really cement bitcoins. The ship has sailed.

[–] dantheclamman@lemmy.world 4 points 13 hours ago

I get what you're saying. But it undermines their efforts in other forums to try to fight climate change, if elites there are cashing in on carbon-heavy crypto, while everyday folks suffer from collapse of fisheries, saltwater intrusion into groundwater, etc

[–] MNByChoice@midwest.social 26 points 21 hours ago (3 children)

That us cheap. Many places charge ~$250K. But then you own a house and can sell it later...

[–] Pixel@lemmy.ca 3 points 11 hours ago

The whole point of this card is basically to bypass KYC requirements for crypto exchanges that don't allow US customers. They are very explicit about this in their marketing.

[–] HobbitFoot@thelemmy.club 23 points 21 hours ago (2 children)

That's for actual residency. This seems to be able to exist in the country digitally. Other countries, like Estonia, have the same thing.

[–] Pixel@lemmy.ca 3 points 11 hours ago (1 children)

It can technically be used to extend your stay in Palau long enough to establish tax residency since it would allow you to stay in Palau for longer than 183 days a year. Not unusual for people sitting on big crypto stashes to move abroad or buy citizenships in order to cash out their crypto without capital gains tax (or at least that's how it goes - I imagine the IRS doesn't go down that easily).

[–] outbakes9510@piefed.social 4 points 8 hours ago

The "substantial presence test" is more complicated than you might have thought: https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test

If you spent a full 210 days (30 days from a visa on arrival followed by 2 consecutive 90-day extensions) each year in Palau, but spent the remainder of every year in the USA, you would be physically present in the United States (U.S.) on at least "183 days during the 3-year period that includes the current year and the 2 years immediately before that". Specifically, the "count" would be 232.5 (instead of 465 since days in earlier years are counted as 1/3 or 1/6), which is at least 183.

It seems the easiest way to avoid being considered a United States resident for tax purposes from meeting the substantial presence test is to not be physically present in the United States (U.S.) on at least 31 days during the current year. If you wanted to do that, there are many places where most United States citizens are already allowed to stay for "365 days" or "1 year" or "Unlimited", notably including Palau, as well as Marshall Islands and Albania and other countries: https://en.wikipedia.org/wiki/Visa_requirements_for_United_States_citizens

[–] MNByChoice@midwest.social 2 points 17 hours ago

Ah, thank you.

Used to be the DOJ had an expansive view of USA sovereignty. Guess we will see.

[–] corsicanguppy@lemmy.ca 4 points 19 hours ago (1 children)

And when you do that with Canada, you make a tidy profit!

Then again, if you can find a house anywhere in the country, with running water, for less than a mil, there's a gov analyst job waiting for you too!

[–] MNByChoice@midwest.social 2 points 17 hours ago* (last edited 17 hours ago)

Is well water fine? There are some nice but small houses in northern Alberta.

I look at real estate listings a lot to avoid doom scrolling.

Edit: Correction, west of line between Calgary and Edmonton.