Thought Leadership

Opinion: The great crypto clean-up is certainly underway

Author
Aidan Larkin
CEO
"Using new technology to break the law does not make you a disruptor. It makes you a criminal."

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Our co-founder and CEO Aidan Larkin shares his perspective on the record-breaking $4.3 billion fine and guilty plea from the Former CEO of Binance, Chanpeng Zhao (CZ).

Drawing a comparison to HSBC's chequered history of anti-money laundering failures, he highlights the potential positive effects of taking decisive action to pave the way for the mainstream adoption of digital currencies. He emphasises the crucial role of crypto asset recovery as a blueprint for better industry practices, citing the notable success of the IRS Criminal Investigation in recovering $7.7 billion and raises the question: will these developments prompt more accountability for money laundering failures?

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It appears that the great crypto clean-up is certainly underway. 

Powerful words from the Attorney General in yesterday's statement announcing the record-breaking $4.3bn fine (one of the largest penalties in US corporate history) and the guilty plea from Binance founder and former CEO CZ. 

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‍“In just the past month, the Justice Department has successfully prosecuted the CEOs of two of the world’s largest cryptocurrency exchanges in two separate criminal cases.

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“The message here should be clear: Using new technology to break the law does not make you a disruptor. It makes you a criminal.”

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The statement is a damning indictment of the scale and indifferent attitude shown by some staff, enabling billions of dollars to be moved to evade sanctions and launder proceeds of crime. 

In addition to the above, some of the world's biggest exchanges and crypto companies have been making headlines in the last few weeks, from prosecutions at FTX to allegations of $1bn caught in a legal battle at Tether. 

Before the naysayers pile on and say, “I told you so”, consider the reverse. 

This sort of activity and greater scrutiny/transparency is precisely what any industry needs to create a safer sector.

Record fines for evading sanctions and laundering Mexican cartel funds didn’t really dent HSBC's reputation to the person on the street, so we shouldn’t assume the robust action taken against Binance, FTX, and their respective founders will hurt the industry. The opposite is more likely: this cleanup paves the way for the Blackrocks and establishment to get more involved in the sector. 

I’ve repeatedly said crypto asset recovery is giving the world the blueprint for better asset recovery. IRS Criminal Investigation has recovered $7.7bn in just two cases via fines and forfeiture, giving a clear example of the art of the possible.

Will we now see more accountability at banks to hold the decision-makers responsible for money laundering failings? Will the bankers who launder criminal funds face criminal charges where, historically, prosecutions have been scarce? Time will tell…

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Read more: https://www.justice.gov/opa/speech/attorney-general-merrick-b-garland-delivers-remarks-announcing-binance-and-ceo-guilty

Founder & CEO @ Asset Reality

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