The Financial Crimes Enforcement Network (FinCEN) report raises issues regarding financial crimes linked to traditional banking and cryptocurrencies.
Banks and Financial Crimes
A new report from FinCEN indicates that American banks laundered approximately $312 billion for Chinese criminal networks between 2020 and 2024. The report analyzed over 137,000 Bank Secrecy Act reports, revealing an average of over $62 billion flowing through the U.S. banking system annually from these organizations. Additionally, these networks are closely related to drug cartels, enabling them to jointly utilize resources for money laundering of illicit proceeds.
Cryptocurrencies Under Pressure
Despite this evidence, cryptocurrencies have faced increased scrutiny as a supposed tool for money laundering. Politicians like Elizabeth Warren have called for stricter regulations, asserting that criminals are actively using digital assets. However, research indicates that illicit crypto activities amount to less than 1% of total transaction volumes, contrasting significantly with the extensive unlawful activities present in traditional banking.
New Technologies for Crypto Market Oversight
The Commodity Futures Trading Commission (CFTC) is adopting a new surveillance technology developed by Nasdaq to monitor market abuses. This technology will also be used for cryptocurrency markets. Critics warn that these measures may lead to the establishment of a digital surveillance state and threaten the decentralized nature of blockchain-based finance.
The findings from the FinCEN report highlight that, despite political scrutiny towards cryptocurrencies, the bulk of illicit financial activity continues to flourish in traditional banks.
