Leaked FinCEN data shows that that global banking is responsible for $2 trillion lost in dirty money or money laundering cases which only increases the need for public blockchains and DeFi as we are reading more in the latest blockchain news.
Banks facilitated a minimum of $2 trillion of money laundering from 1999 to 2017 so it looks like the structure of finance is broken as the banks operate as the main beneficiary of money laundering as well as enforces of anti-money laundering programs according to the Leaked FinCEN data. Defi has the ability to fix these issues with accounting ledgers that can be accessed and tracked by anyone across the world.
The banks all over the world have been caught red-handed with money laundering and helping individuals evade American sanctions according to the FinCEN documents. The traditional financial system is broken but can it get better with the help of blockchain technology? Governments have been wary of public ledger cryptocurrencies for many years as in their eyes, digital assets are nothing more than the tools to aid money laundering and illicit financial activity.
Bitcoin and other cryptocurrencies are used to facilitate illicit activity as the main difference is that the biggest banks are regulated and should be under careful watch by governments and regulators. The leaked documents now only show the depth of the negligence of the regulators. The documents showed that FinCEN documents are showing a minimum of $2 trillion of funds that were laundered through the banking system between 1999 and 2017 and that $1.3 trillion comes from Deutsche Bank.
Activities outlined in these documents include laundering funds from individuals that are helping people escape financial sanctions and embezzlements as well. Institutions file these reports to identify suspicious movements of funds but they are not proof of wrongdoing and lead to further investigations. It’s also worth noting that the documents by the ICIJ only comprise 0.02% of all suspicious activity reports from 2017 and 2017. The total amount of money laundered by banks could be higher than the $2 trillion in the reports.
Public blockchains are transparent and auditable by anyone while the bank ledgers are open to bank employees and by hired professionals. This is impossible to happen on public blockchains because the information is public. In the traditional financial systems, the banks are both facilitators and enforce anti-money laundering laws.
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