The FinCEN papers, which were disclosed last week, describe how some of the world’s largest banks move trillions of dollars in questionable transactions for suspected terrorists, kleptocrats, and drug lords. And the United States government has done nothing to stop it. The Treasury Department’s Financial Crimes Enforcement Network is responsible for fighting money laundering, terrorist funding, and other financial crimes. A collection of “suspicious activity reports” provides insight into financial corruption and how governments have been unable or unwilling to combat it.
Despite bank workers’ warnings, profits from deadly drug conflicts, billions embezzled from poor nations, and hard-earned assets taken in Ponzi schemes all flow via financial institutions. These reports are available to US law enforcement agencies and financial intelligence operations from other countries. Despite the fact that FinCEN is aware of money laundering, it lacks the authority to prohibit it.
Money laundering is a criminal act that extends beyond the realm of finance. It’s a tool that allows for all kinds of criminal activity, from drug trafficking to political espionage. And it’s all made possible by banks. BuzzFeedNews selected many of the most trusted banks in a thorough investigation. Current investigations reveal that well-known JPMorgan Chase JPM -2.3 percent, HSBC, Standard Chartered, Deutsche Bank, and Bank of New York Mellon are all involved in transferring cash for suspected criminals, even after penalties and convictions.
Banks and their executives are generally immune from punishment under the existing financial system, as long as the bank files a notification with FinCEN indicating that it may be aiding illicit conduct. The banks are basically given a pass because of the suspicious behavior warning. As a result, illicit monies continue to flow through banks into a variety of industries, including oil, entertainment, and real estate, further dividing the effluent from the poor, while the institutions we have come to trust enable it all.
According to the United Nations, the amount of money laundered globally in a year amounts to 2 to 5% of global GDP, or $800 billion to $2 trillion, with more than 90% of money laundering now going undetected. Similarly, despite data to the contrary, the bitcoin sector has been accused of being a vehicle for money laundering. Only 1.1 percent of all bitcoin transactions are thought to be illegal. Its implementation in the casino or entertainment industry raises a lot of questions, since the most popular games, for example, such as blackjack switch or many others are offering crypto transactions, which is perceived to be the way of illegal transactions. Bitcoin was formerly closely connected with the Silk Road, an anonymous online dark-net bazaar where users could buy firearms and illicit substances.
However, as the Bitcoin network grows in popularity, it is getting easier to trace transactions on public blockchains, while private banking activities stay concealed in plain sight.
Why is money laundering so damaging to the economy?
It is our responsibility as financial services providers to combat illegal behavior. This is a duty that everyone bears. However, once the rules are set, individuals will attempt to circumvent them. There are also some who just desire more business and, whether consciously or unconsciously, will assist these transactions. We live in a complicated world where one country may consider an act unlawful while another does not. Many individuals see the world in black and white, yet the world is truly grey. Not all banks are bad, and not all cryptocurrency exchanges are harmful.
How do the traditional financial and cryptocurrency businesses compare?
It is a transparent ledger if you use Bitcoin. You can track the cash all the way back to where the coins were produced if you have a few transactions. As a result, blockchain acts as a very transparent record that anybody can examine. It is not difficult for an algorithm to assess the origin if you put together a few data points and do a cluster analysis. Although privacy coins are more difficult to monitor, their market capitalization is low, making bigger transactions more challenging. To be honest, it is far easier to carry out illegal activities with fiat currency than it is with cryptocurrency.
How would you compare the volume of illicit crypto transactions to the volume of unlawful fiat transactions?
It’s most likely a thousand times lower. Basically, moving any significant quantity of money in cryptocurrency discreetly is quite difficult. Many of the addresses may be matched to known people using third-party monitoring technologies and databases. Because the bitcoin market cap is so small, you can’t move $100 million without going via a controlled exchange, which makes it much simpler to trace.
Satoshi Nakomoto, the founder of Bitcoin, began the cryptocurrency industry as a battle against bank wrongdoing. The genesis block of Bitcoin, for example, included a reference on bank bailouts in 2008 and 2009. The question that arises, in this case, is that, is that ethos, the desire to knock down the big man, still alive in the bitcoin industry today?
Some in the crypto community are opposed to banks, currency, and other forms of money, while others believe cryptocurrencies are utilized by drug lords. Those are two opposing viewpoints. Cryptocurrency, the first case provides more freedom in terms of transactions, investments, holdings, savings, and so on. We’re merely giving users another option if they value their independence and autonomy. It is widely accepted that crypto provides more financial independence, and as a result, we aim to make crypto more accessible to more individuals. If someone does not like a bank, they should not use it.
Is there a balance between the government’s duty to protect its citizens and its duty to promote innovation?
Governments should function as public utilities. Roads and fire departments should be provided. It is always terrible for the economy when the government intervenes. When the government aids one party, it invariably harms the other. The government skews the economic balance by assisting a party that isn’t competitive enough to survive. As a result, if the government bails out major banks or any firm for that matter, it merely appears to be helping.