Posted 11 months ago | by Ben Armstrong
Fiat Currency Still the Most Popular Choice for Money Laundering – According to Reality!
One of the charges that seem to pop up over and over again is that cryptos are used extensively for money laundering – which isn't true. Well – ok – maybe it is a little bit true, but in comparison to cash – cryptos are not at all popular for making dirty money look clean.
According to SWIFT – which has loads to lose as cryptos become more popular, cryptos aren't popular for money laundering. Most criminals still prefer cash – or using shell companies, among other ways to wash cash.
Cryptos are used for illegal activities, as is cash. While it is easy to assume that because cryptos are popular with criminals as they offer a high degree of anonymity, the simple fact of the matter is that most people still use cash.
Seems pretty simple – no?
Actually – The Banking System is Wildly Corrupt
Just for fun, let's take a look at some of the biggest recent money laundering scandals that involved some of the biggest banks in the world. You see...the banking system has a great PR department, and is basically above the law.
While major banks are fined after illegal acts are discovered, executives are rarely given any jail time – in fact, acts that should be criminal offenses are overlooked, and the banks cover up any wrongdoing with lots of fresh cash (which all comes from central banks anyway).
This lovely social arrangement was made apparent in the recent HSBC money laundering case, where the mega bank paid billions in fines after it was discovered that it had helped drug cartels launder their money – all without the help of cryptos.
According to Reuters,
“...the bank agreed to take steps to fix the problems, forfeit $1.256 billion, and retain a compliance monitor. The bank also agreed to pay $665 million in civil penalties to regulators including to the Office of the Comptroller of the Currency, the Federal Reserve, and the Treasury Department.”
That's right – HSBC actually paid a fine to the FED – which can print as much money as it wants!
HSBC was in hot water for working with some of the most dangerous cartels on the planet.
To wit (also from Reuters),
“Mexico’s Sinaloa cartel and Colombia’s Norte del Valle cartel between them laundered $881 million through HSBC and a Mexican unit, the U.S. Justice Department said on Tuesday.”
We have to wonder how all this happened, especially given the amounts of money that are involved. Smaller businesses have issues transferring money via the US banking system on a regular basis, so when hundreds of millions in drug money are flowing though the NY FED – well, it all seems pretty suspicions.
KYC for the Proles
One could be forgiven for thinking that the banking system is a two-tier system that is designed to shake-down the little guy, while enabling transnational criminals to do as they please with fiat currency.
If you want to open a bank account – well – bend over. The bank is going to want extensive information about who you are, where you live, where your money is coming from, and whatever else they think of.
You have no right to access the financial system, and the banks will treat you like chattel.
Criminals, on the other hand, have open access to the global banking system, and make it work for their needs. The Danske Bank A/S scandal was a perfect example of how the global banking system really works.
“The Danish lender acknowledged that the branch moved nearly a quarter trillion dollars’ worth of cash into the global financial system, much of it from potentially illicit activity in Russia. It used the three banks’ global presence to convert foreign cash into U.S. dollars on behalf of its clients from 2007 to as recently as 2015.”
The 'branch' that Bloomberg references in the above quote was a small branch of Danske in Estonia, which had no business whatsoever dealing in that amount of cash (or whatever the bad actors were pushing through it).
US banks like Bank of America and JPMorgan Chase were on the other side of those transactions – which makes it even more difficult to believe that no red flags were raised at the NY FED – as the US banks would have been able to see that amount of transactional volume was originating from a small bank branch in F$#(*@# Estonia!
The Cards are Staked Against You
It isn't difficult to see that one of the biggest reasons why the established financial system has been so down on tokens is that they represent an existential threat to the money monopoly that has kept the global banking business model running for decades.
As a small actor in the global financial system, all the regulations apply to you, and will be enforced as though you are a bad actor who has to prove that your intentions are legitimate. If, by some chance you are an international criminal, you already understand that the banks are made for you, and will help you in any way they can.
Kind of makes us wonder who is behind the whole thing – or why the US FED would actually be on the receiving end of a fine paid by a money center bank like HSBC...
Articles on Bitboy may contain affiliate links that help us to remain profitable. It might come as a surprise, but all these great articles aren’t cheap to produce. If you don’t mind helping us out, please click on the links!