I really don't understand how this is Airbnb's problem. Why do people attack these kinds of services so often? It's not their fault people are paying through them and then having people send the money back. What are they supposed to do? Send someone to the home to check that the person is actually staying there?<p>I mean, the way this works you could literally use any service ever. Why is AirBnB, in this case, any different than like Paypal, eBay, or Amazon or literally any online fund transferring for goods service?
The actual title is "Inside Airbnb’s Russian Money-Laundering Problem", which is more suitable IMHO, as it highlights this is a local issue in Russia, not AirBnB as a whole
So let me get this straight:<p>1.) they book a night at a cooperating-host with a stolen credit card<p>2.) host receives payment minus AirBnB fees 2 days later<p>3.) host transfers amount minus his own cut to criminals<p>4.) chargeback from CC owner. I'd guess that Airbnb either charges the Host for the chargeback or cancels the entire account. How is this „scalable laundering“?
This is not money laundering. This is a simple case of extracting money out of stolen goods. Since unauthorized transactions on CC would be reversed, it is at most inconvenient.
Money-Laudering is sometimes confused with different crimes because, in the modern world, it is often a necessary adjunct to financially motivated crimes.<p>Criminals often do business in cash and can't report it on their income taxes. Money laundering is getting this "dirty" cash safely into a bank account or legal investment without revealing the crimes that caused the accumulation of cash.<p>In the US, banks are required to "know" their customers. Moving between cash and bank accounts is only possible with an account at the bank and every cash transaction over 10K is reported to the government. Furthermore, traveling with more than 10K into or out of the country requires paperwork to be filed with the government. All of this makes it difficult to use the cash sourced from criminal activity.<p>AirBnB appears to be an easy way to launder a modest amount of money. Heidi Fleiss was the Hollywood Madam and would have had a "dirty" money problem, not a huge dirty money problem like drug cartels, but nevertheless, lots of cash and no way to explain it to the banks: one million dollars in her first four months[1].<p>It doesn't seem like AirBnB would be practical for such a large operation; however, think of one of her operatives, they might be able to hide a couple of thousand dollars a week of cash income by pretending to be renting out their place as an AirBnB. The challenge would be on the payment side to AirBnB, setting up enough cards under fake names, etc. because the government also tracks these and would detect any trivial cycles between a set of cards and or people.<p>The Netflix TV series Ozark, a Breaking Bad kind of show, but staring an accountant rather than a chemist, revolves around this problem.<p>[1] <a href="https://en.wikipedia.org/wiki/Heidi_Fleiss" rel="nofollow">https://en.wikipedia.org/wiki/Heidi_Fleiss</a>
I expect that a good question to ask as a founder of a new business these days is, "How might this be used to launder funds?" and if you're the bad kind of entrepreneur make that really easy to boost early growth, and if you're the good kind put controls in place to prevent it from happening.<p>One of the things I dealt with at Blekko was people clearly trying to use the search engine to find sites with vulnerable (unpatched) Wordpress or Joomla or other storefront frameworks. We spent a lot of time banning IP addresses which were doing that rather than treat them as higher traffic numbers.