This week saw a bombshell dropped regarding trillions of dollars worth of illegally laundered
money, and it didn’t fit the narrative of a common question you hear when you mention crypto to the
yet to be initiated. Something along the lines of “Isn’t that used by criminals?”
If you want another arrow in your quiver when making strong arguments against the legacy banking system,
stick around as we break down the leaked FinCEN files and what it all
means for the future of Crypto on this week’s Exodus Crypto News.
If I were to head out on the street to ask passers-by what form of money they think is used
most to facilitate criminal activity, I would probably receive cryptocurrency as the most
predominant answer. Most of the crypto ecosystem already knows crypto is used for
legitimate publicly verifiable transactions. However, the popular narrative espoused by
governments and news outlets would lead you to believe otherwise and, with every opportunity,
dig at crypto, leading the general public to think Crypto users are up to no good.
When the truth looks more like this and more often than not, are here to make the
work a better place. The leaked FinCen files turn the “crypto is bad” narrative on its head
and are definitive proof showing the US dollar, facilitated by major banks, is by far the most
used currency for illegal activity and… it wasn’t a secret to the banks. Before we go any further
let me provide some context. The FinCEN files I’m talking about are more than 2500 documents
from between the years 200 and 2017, which were leaked to Buzzfeed News this week. These documents
are from banks informing the Government about concerning transactions that may be tied to money
laundering. It’s required by law for financial institutions to report the transactions to the
authorities and are secrets guarded more closely than the deposits in their vault. Of course, this
was more than Buzz feed could chew on themselves, so they invited over 100 news organizations
to share the information with. The leaked FinCen documents are called SARS which stands
for “Suspicious Activity Reports” About now in this explanation, you’re probably asking “Kris,
How did all this happenren’t banks supposed to stop these transactions from happening in the first place?”
I’m not a legal expert and I would also assume the same thing, there are checkpoints set up so
the gatekeepers cannot help clients launder money. For instance, KYC/AML which stands for “know your
customer” and “Anti Money Laundering”
By law, banks have to know who their customers are and the AML regulations require them to monitor and
report suspicious financial activity, not stop it. The leaked documents identified HSBC allowing
criminals to move millions of stolen money even after US investigators made the bank aware of the
scam. JP Morgan allowed a company to move more than 1 billion dollars without knowing who owned
the company. Barclays Bank in London was involved in moving money to avoid sanctions against Russia.
And the list goes on and on. Let’s take a look at a short explainer from the ICJC illustrating
how this scheme works.
So while not all these trillions of dollars processed every day are money
laundering, the 2 trillion in the leaked FinCEN Files is really just a small snapshot. So why do
these banks let these transactions happen, even if they know it’s money laundering. Let's take a look at the rest of the video and it will explain.
It’s simple. Because it helps banks make a lot of money. So what does this all mean for crypto?
Well for one, it’s a good story to tell your friends who think you’re crazy for being
involved in something that is mostly used for criminal activity because it’s not and the money
they hold to so dearly, the US dollar is. Andreas Antonopoulos, the author of the Internet of Money,
has been giving public talks about this for years and has a hot take in regards to this news. At the
beginning of a multi-tweet thread, he says, “A lot of people who are into cryptocurrencies will
see this FinCen leak as vindication and proof that banks are money launderers.
But, this will be used against cryptocurrencies…” He then goes
on to identify KYC and AML do not work and they are used to control the tool
and not the criminal act. And despite the obvious truth, nothing will change except tighter controls
and increased surveillance which will also corrupt more bankers. Andreas then goes on to say that open
and private cryptocurrencies will not comply with these tighter regulations because they can’t
without breaking every feature and capability they have. It’s worth a read on twitter and if you’re
not in with crypto twitter, I’ll add links to some of Andreas’s talks on the subject below. Let
us know how you feel about this news in the comments and if any of this information helps with
explaining to your friends that Bitcoin and Crypto fix this. While we’re on the subject of
banks. The US office of the comptroller has issued an opinion that US banks can hold reserves in
crypto stablecoins. A big move for crypto into mainstream adoption. The acting Comptroller
of the Currency, Brian P. Brooks said: “National banks and federal savings associations currently
engage in stablecoin related activities involving billions of dollars each day. This
opinion provides greater regulatory certainty for banks within the federal banking system
to provide those client services in a safe and sound manner.” and then the SEC followed by releasing
further guidance to clarify when a stablecoin is not a security “market participants may
structure and sell a digital asset in such a way that it does not constitute a security and
implicate the registration.” If you’re a frequent watcher of this program you’ll remember
way back in last week, when the state of Wyoming issued a banking license to centralized exchange
Kraken. Now we’ve been calling this for a long time and at the moment things in Crypto/banking
are moving really fast so we’re watching how things unfold. You can be sure though we’ll
always report it here as new details emerge. And now for some bullish Bitcoin news - Do you
remember Microstrategy, this was the firm who last month bought 250 million dollars worth
of Bitcoin to add to its corporate balance sheet?. Apparently, they were just getting
started because a few weeks later they added another 175 million dollars to their books.
The CEO of Microstrategy in 2012 made a statement against bitcoin that didn’t age well where he
said “Bitcoins days are numbered, It seems like just a matter of time before it suffers
the same fate as online gambling. Michael Saylor has been making the rounds on the crypto podcast
interview circuit where he acknowledges he was wrong and in the past used twitter to
post stream of consciousness thoughts, including those about Bitcoin. Microstrategy has made the
move into Bitcoin as its primary cash reserve to hedge against an inflationary US dollar. Do you
think Microstrategy is a first-mover here and more corporations will follow? If you want to know more
about Microstrategy and why this move matters, click the link above to check out the article on
the Exodus blog. Well, we’ve made it to the end of this week’s program and the cryptoverse has yet
to disappoint. If there are items you would like us to cover or are really interested in learning
more about, let us know in the comments. We read every single one and If you liked this video,
please give it a thumbs up and subscribe to the channel for more crypto videos from Exodus.
Until next time, HODL on!