It’s surprisingly difficult to move around large amounts of fiat money without being caught. Large scale gangs get good at it by necessity, but many people have gotten caught. More importantly the effort to launder money is a major disincentive for criminal activity as it shifts the risk vs reward ratio.
HSBC was fined $1.9 billion for processing (not profiting) $881 million + $660 million. Their profit was probably only a few percent of that. But even if they simply took all $1.5b as profit, they still were fined more than that.
You might say they probably laundered more money than that. You're probably right. But it ain't what you know, it's what you can prove.
Assuming the bank profits a few percent, a $1.9 billion fine wipes out the profit from 10s, maybe 100s of billions of laundered money.
And nobody went to jail. Which is the point of the argument. HSBC are STILL trading and moving money today.
This was also not the first time HSBC was caught doing this.
Nothing has changed. They made the losses back. I know execs calculate fines as operational expenses because I've helped them do it (granted not HSBC but people aren't too disimilar from each other)
That is the very different problem of willingness to punish "system-critical" money launderers, versus the ability to detect rogue money launderers. Failure on one problem does not invalidate efforts on the other.
What is the difference between the two? Organized crime always goes through banking insiders, it just makes sense. That's how high level bankers get rich generally.
I’m not so sure about that. In my country (Hungary) actually all big crimes have to go through the prime minister, he’s working together with the national bank and lots of other politicians, bankers and lawyers to steal the EU money that the country gets. Otherwise it’s a peaceful country (that is getting less peaceful as the government steals more of the economy).
Big crimes make the news, small crimes are when people are getting mugged. Both types of crime are significant, but small crimes are vastly more common.
> It’s surprisingly difficult to move around large amounts of fiat money without being caught
For the average Joe maybe.
For corporates? What a joke. I work in fintech systems for ForEx and credit lending. Gets abused by banks allllll the time. And I don't mean some sketchy african or asian bank. I mean HSBC. They still trade, despite the billions in fraudulent transactions they've knowingly moved.
And HSBC are just retarded, I promise you ALL the large banks have moved fraudulent transactions. Not always intentionally, but banks consist of people and people are easily swayed with the right pressure points.
Does crypto make this easier to do? Yes, but the problem isn't the medium of value transfer. That's as untrue of crypto as it is of fiat.
Even crypto needs to be converted to fiat at some point to actually spend it, either directly so you can move it to a bank account or turn it into cash, or indirectly by using a crypto-backed credit cards and if that money isn’t legit, you still have to launder it if you can’t prove to your tax authorities where it came from.
Thought about that, then realized that we (as in most of us) hardly use cash anymore and cash would also require an in-person exchange. It seems that crypto (by accident, not design) fixes most problems faced by criminal activities
> No claims of magic, but crypto is undeniably well-suited for and utilized by criminals.
All right, but not all crypto is used or crime, in fact most of this volume is used for speculation, hoarding and to circumvent capital controls (getting one's dough out of China).
The thing is that most of it is traceable. Me and my colleagues have witnessed the CEO of a company in a neighbouring office being arrested and extradited to the US on charges of money laudring and fraud using crypto assets (BTC and ETH specifically). So the arrest/indictment of these two doesn't come as a surprise, it was bound to happen as soon as they got caught or stepped out of Russia.
I presume because it is clear what community bitcoin came from (the cipherpunks). It is obvious that this community would want bitcoin, and it is not a criminal community.
Besides, bitcoin isn't tailored perfectly. And the coins that are tailored better mostly seem to have libertarians and people who enjoy the tech building them.
It's really not clear that crypto is disproportionately used for criminal activity, in fact there's evidence it might be less commonly used for criminal activity
Binance, wirex, crypto.com and others offer credit cards backed by cryptocurrency balances. Sure, technically, they sell the crypto for fiat as you use it, but to the user it’s the same as spending the cryptocurrency directly.
And there are at least some online businesses that accept crypto, certainly security focused services like Mulvad and ProtonMail but I’ve occasionally seen it for other SaaS products too, although not too often.
Not really a fair comparison, as moving traditional money becomes harder and harder, to the point where law abiding citizens can get caught in a trap, should they move or handle too large sums incorrectly.
And it's going to get much harder. There's a reason for the push to cashless societies.
Fixed that for you.