99.9% of fiat money laundering unprosecuted according to lawyer who took down the infamous silk road website. The comment was made in a news article covered by cointelegraph.
Kathryn Haun — a general partner at Andreesen Horowitz and the Justice Department’s prosecutor for the infamous Silk Road case —- says that the fiat-dominated financial system is inept at tackling the very thing it purports to worry about when it comes to crypto.
According to Haun, governments that complain that cryptocurrencies can be used for money laundering are woefully inept at stopping it when it comes to fiat currencies. 99.9% of fiat money laundering unprosecuted according to the data.
Yet she stressed the arguable absurdity of the defenders of the existing system emphasizing concerns over an issue that current approaches have proved to be wholly inept at preventing:
“Our current system is doing a pretty terrible job of it, I’d say. Let me tell you what I mean. 99.9% of all money laundering crimes go unprosecuted. I testified before the U.S. Senate about this, and the person who cited that statistic, other than Senator Chuck Grasley, was the ex-Treasury official. And I thought that can’t be right. But I researched it and indeed it’s true.”
“The financial services industry is spending $20 billion a year on AML [anti-money-laundering] and KYC [Know Your Customer checks],” she added, “so I would ask you: is it even working? I don’t think it’s working.”
Bass noted that having a centralized financial system provides governments with greater leverage when it comes to bad sovereign actors, a power that cryptocurrency could diminish:
“ISIS had $2 billion, it’s a widely known secret that it’s held in Turkish banks and run by legitimate businessmen who decide to launder money. If the US is looking to sanction bad sovereign actions, we can actually make it really difficult for them to move significant amounts of capital today or do business with US banks.”
Haun responded that to the extent that one can accept that a given government’s authority is being exercised in good faith and for legitimate ends, this holds true:
“But I would also say, at what cost do you do that? You have 2 billion people in the world today who are unbanked, who have zero access to financial services.”
Financial Action Task Force (FATF), set up 30 years ago to tackle money laundering, told countries to tighten oversight of cryptocurrency exchanges to stop digital coins being used to launder cash.
The move by FATF, which groups countries from the United States to China and bodies such as the European Commission, reflects growing concern among international law enforcement agencies that cryptocurrencies are being used to launder the proceeds of crime.
Countries will be compelled to register and supervise cryptocurrency-related firms such as exchanges and custodians, which will have to carry out detailed checks on customers and report suspicious transactions, FATF said in a statement.
“This will enable the emerging FinTech sector to stay one-step ahead of rogue regimes and sympathizers of illicit causes searching for avenues to raise and transfer funds without detection,” U.S. Treasury Secretary Steven Mnuchin told a FATF meeting in Florida, according to remarks posted on the U.S Treasury website.
Simon Riondet, head of financial intelligence at Europol, the European police agency that coordinates cross-border investigations, told Reuters he saw a growing use of cryptocurrencies in laundering criminal money. As said in the beginning, in spite of this, 99.9% of fiat money laundering unprosecuted.