The high-trust-v-low-trust environment problem--in spades

FRONT PAGE: "Thieves Winning Online War, Maybe Even in Your Computer," by John Markoff, New York Times, 6 December 2008.

The basic point:

A well-financed computer underground has built an advantage by working in countries that have global Internet connections but authorities with little appetite for prosecuting offenders who are bringing in significant amounts of foreign currency.

So we're talking New Core and Gap states: the more the connectivity, the more the temptation to arbitrage the differences in rule sets--stealing from high-trust environments and pulling money into lower-trust ones.

They still call it "wire fraud," you know.

Sign of the frontier times.

Comments

[Eric Chen]

Sounds like the SEC.