Myth of Money: Money Laundering, Banks And Cryptocurrency

Some of the biggest banks in the world move trillions of dollars in suspicious transactions for suspected terrorists, kleptocrats and drug kingpins.

Welcome to this week’s edition of the Myth of Money, a weekly newsletter on all things money, economics and technology read by 10,000+ subscribers.

Disclaimer: The following is not intended as investment advice. Do your own research.

“We live in a complex world, where one country may view an act as criminal and the other may not. A lot of people have a black and white view, but the world is actually grey,” says CZ, CEO of Binance. 

Last week, a set of documents known as the FinCEN files were released, detailing how some of the biggest banks in the world move trillions of dollars in suspicious transactions for suspected terrorists, kleptocrats and drug kingpins. And the U.S. government has failed to stop it. 

Cartoon: Russian Money Laundering - The English Blog

The Financial Crimes Enforcement Network (“FinCEN”), an agency within the Treasury Department, charged with combating money laundering, terrorist financing, and other financial crimes. A collection of “suspicious activity reports” offers a window into financial corruption, and how governments are unable or unwilling to stop it. Profits from deadly drug wars, fortunes embezzled from developing countries, and hard-earned savings stolen in Ponzi schemes, all flow through financial institutions, despite warnings from bank employees

These reports are available to US law enforcement agencies and other nations’ financial intelligence operations. Although FinCEN is aware of the money laundering activities, it lacks the authority to stop it. 

Money laundering is more than a financial crime. It is a tool that makes all other crimes possible - from drug trafficking to political crimes. And banks make it all possible. In a detailed expose, BuzzFeedNews named several of the most trusted banks. Current investigations show that even after fines and prosecutions, well-known JPMorgan Chase, HSBC, Standard Chartered, Deutsche Bank, and Bank of New York Mellon are all involved in moving funds for suspected criminals. 

The current financial system largely insulates the banks and its executives from prosecution, so long as the bank files a notice with FinCEN that it may be facilitating criminal activity. The suspicious activity alert effectively gives the banks a free pass. And so, illegal funds continue to flow through banks into various industries from oil to entertainment to real estate, further separating the rich from the poor, while the banks we have grown to trust, make it all possible. 

According to the United Nations, the estimated amount of money laundered globally in one year is 2 to 5% of the global GDP, or $800 billion to $2 trillion, with more than thank 90% of money laundering going undetected today. 

This week, I had an opportunity to sit down with Chanpeng Zhao “CZ”, the Founder & CEO of Binance, largest cryptocurrency exchange by volume in the world, to get his take on money laundering both in the traditional and the digital finance worlds. 


This Week By the Numbers 

Markets are down across the board with increased volatility. Both the S&P and the Dow have continued the 4-week losing streak with Big Tech continuing to prop up the NASDAQ. Bitcoin has been in an unclear territory between $10k and $11k, as investors are waiting for a bullish sign.

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America's Housing Shortage Is Intensifying During the Pandemic

The number of homes for sale dropped for the twelfth-straight month in July, plummeting nearly 20% to just 1.9 million homes. A handful of dense, expensive places bucked the national trend. In the San Francisco metro area, the number of homes for sale skyrocketed 51% year over year in July after having dropped 2% in February. New York saw the second largest increase, rising 13 percentage points, followed by San Jose, up 7 percentage points. At the same time, the pandemic has exacerbated the trend of Americans moving from expensive, coastal cities to affordable, inland places—intensifying the supply deficit in the latter areas. Read Full Story.

Investment Firm Blockchain Capital Joins Libra Association

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We Are Launching A YouTube Channel!

For Episode #1, I sat down with friend Dean Masley to review 10 Most Cutting Edge Hardware Wallets on the market today.

Subscribe to the Myth of Money YouTube here.

Thank you for reading this week’s edition of the Myth of Money.🚀

Until next week,

Tatiana Koffman

By Tatiana Koffman

Hi there and thanks for reading. If you stumble upon my newsletter, you will notice that I write about money, economics and technology.  I hold a JD/MBA and spent my career in Capital Markets working across Mergers & Acquisitions, Derivatives, Venture Capital and Cryptocurrencies. I believe in empowerment through closing the financial education gap and creating equality of opportunity for the next generation. Check out my articles in Forbes here.

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