FinCEN: Remind Us That Bitcoin Is Still Not For Money Laundering
This week, a released cache of thousands of reports from major banks showed that these institutions ignored their own concerns and willingly moved trillions of dollars around the world on behalf of suspected terrorists, criminals and corrupt governments.
Known as the “FinCEN Files” because the banks’ reports were
filed with the U.S. Treasury Department’s Financial Crimes Enforcement Network
(FinCEN), this cache was brought to light by a group of international
journalists. There were more than 2,100 suspicious activity reports released
this way, which referred to more than $2 trillion of transactions occurring
from 1999 to 2017, according to The New York Times.
Lenders that filed such reports and then willfully ignored
their own concerns include JPMorgan Chase, Bank of America, HSBC and Deutsche
Bank. These groups moved funds for the likes of a Taliban-tied company, groups
connected to the North Korean regime and the organizer of a sovereign wealth
fund fraud in Malaysia.
There’s definitely a Rabbit Hole to be explored about FinCEN
and its laborious journey to regulate cryptocurrency activity. But I think the
real entry point from this revelation about the world’s foremost financial
institutions is through the misappropriated reputation that Bitcoin has for
money laundering.
A great place to start on the connections between BTC and
money laundering is with this Bitcoin Magazine article from 2013. Bitcoin has
long held a reputation for facilitating dubious transactions — thanks to its
pseudonymity and privacy protections, BTC was the currency of choice for the
world’s most prolific darknet market, Silk Road. Silk Road was such a prominent
fixture in the Bitcoin economy that Vitalik Buterin covered the project in a
two part report for Bitcoin Magazine back in 2012.
But the truth is that while Bitcoin is a pretty solid tool
for obscuring financial transactions (as Aaron van Wirdum covered in this
exploration of Bitcoin privacy technology from 2018), it’s far less capable of
protecting privacy than some other cryptocurrencies out there. And, as the
FinCEN Files have underscored, the world’s premier financial institutions are
regularly laundering money as well.
So, even though darknet market activity will probably always
remain connected to Bitcoin (as we explained last year), this week’s bombshell
report is another reminder that Bitcoin’s use as a tool for criminals is just
another myth that might apply better to the world’s legacy systems.
Comments
Post a Comment