Cryptocurrency skeptics oftentimes refer to virtual currencies as ”only used by criminals to launder money.” Although such statements are severely misguided, this misconception is nonetheless quite common.



Bloomberg says money laundering activities register $2 trillion a year



Now, however, a recent report from Bloomberg now makes it plain for anyone to see that traditional banks are involved in money laundering far more often than cryptocurrencies.



In fact, Bloomberg notes that illegal transactions involving drugs and other crime amount to an absolutely massive $2 trillion a year. Moreover, traditional banks appear to be highly involved in laundering these funds.



Knowingly or unknowingly, high-profile banks such as JP Morgan, Standard Chartered, and Citigroup have all played a part in laundering funds related to malicious activities – and have subsequently been forced to pay fines for violating sanctions.



In addition to this, HSBC recently failed to monitor approximately $670 billion in transfers from Mexico. They were also unable to notice purchases of around $9.4 billion US dollars.



This allowed both Mexican and Columbian drug cartels to leverage HSBC’s accounts in order to launder illicit funds. When it became clear that HSBC had failed to live up to AML (anti-money laundering) regulations, the bank was fined a relatively meager $1.9 billion.



Furthermore, JP Morgan Chase was fined $2.05 billion for consistently ignoring warning signs related to the Wall Street financier Barnard Madoff – which allowed Madoff to run the biggest-ever Ponzi scheme uncovered in the US.



On the flip side of things, the Wall Street Journal published a report in September of 2018 alleging that criminals had laundered around $90 million through cryptocurrency exchanges during the past two years.



Cryptocurrency money laundering barely noticeable compared to banks



Although naturally significant, this minuscule amount translates to an obscure 0.0045% of the $2 trillion supposedly laundered through banks every year.



That means that the cryptocurrency-related money laundering during two years constituted less than a two-hundredth of a percent of the laundering done by banks every year – arguably not even noticeable in the grand scheme of things.



As such, it becomes increasingly evident that money laundering is not something that is endemic to cryptocurrencies. Rather, the financial world would arguably appear to be substantially more severely impacted by it.



In fact, financial companies or banking institutions that directly control vast funds – as opposed to decentralized cryptocurrencies – could even be said to encourage corruption, as the firms can use the vast sums based on personal interests.



Moreover, cryptocurrency transactions are also far more transparent. This allows transactions to be tracked, meaning it is easier to ”follow the money” – and illicit transactions cannot be hidden by banks.

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