Multiple cryptocurrency voices have pounced on a recent report by the Wall Street Journal, which details how Chinese money launderers are moving billions of dollars worth of illicit funds through financial institutions.
Paul Grewal, chief legal officer at cryptocurrency exchange Coinbase, has stated that "crime cash is king" despite "manufactured hysteria" surrounding the role of cryptocurrencies in funding illegal activities.
$312 billion in illicit money
The report, which cites recent data from the US Treasury Department, claims that a staggering $312 billion worth of ill-gotten money was recently moved via US financial institutions by Chinese money launderers. The dirty cash is primarily linked to Mexican drug cartels.
Banking institutions could potentially face big fines if they fail to flag suspicious transactions. TD Bank, for instance, was forced to shell out as much as $3 billion after it turned out that nearly $500 million had been laundered by a Chinese network with the help of the financial institution.
Why blockchain is better
Greweal claims that blockchain, the technology that underpins various cryptocurrencies, can actually act as a deterrent.
"The transparency and traceability of blockchain act as a deterrent that can help solve problems that decades of traditional compliance have failed to address," he said.
Since transactions are performed on a public database, they can be visible to anyone with proper software.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team