alt Hacker NewsThat’s simple CYA, and also ensures you’ve not only done the illegal activity, you’ve defrauded the brokerage and breached your contract with them, and they get a weak KYC defense as well.
Similar to the “Al Capone” instructions from the IRS:
>Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Schedule 1 (Form 1040), line 8z, or on Schedule C (Form 1040) if from your self-employment activity.
On the other hand, if you want to talk about these stickers all over Seattle saying you’re not allowed to conduct illegal activities on the premises…
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I'm curious if anyone has ever said yes to income from illegal activities. Moreover, I wonder if something like this would be protected under 5th amendment.
I still don’t understand the CYA though.
For the majority of banks, they do not want people to conduct illegal activity via their bank. For the minority of banks which don’t mind it, nothing stops them from adding the clause anyways. A cartel bank probably cannot use the existence of the clause as a defense if they’re still allowing illegal activity.
If the purpose is to allow the bank to terminate accounts suspected of illegal activity, my assumption is they can already terminate for much less than that.