Nasdaq Report: Crypto Excluded from Financial Crimes
A recent report published by Nasdaq reveals that cryptocurrencies, including Tether (USDT) and other stablecoins, do not have a significant impact on financial crimes. The Global Financial Crime Report for 2024, the first of its kind by Nasdaq, aims to analyze and report the extent and impact of financial crime globally. Developed in collaboration with Verafin, Celent, and Oliver Wyman, the report includes a data model based on public and private sources and interviews with professionals in the fight against financial crime.
The Findings of the Report
According to the report, global illicit funds and money laundering amounted to $3.1 trillion in 2023. Fraud losses were estimated to be over $485 billion. In comparison, the entire crypto market has a market capitalization of about $1.5 trillion and generates a daily trading volume of less than $100 billion. The main sources of illicit funds were drug trafficking ($800 billion), human trafficking ($350 billion), and terrorism financing ($11 billion). The report lists various threats such as real-time frauds, money laundering through money mules, scams against consumers, and compromise of email addresses.
No Trace of Cryptocurrencies
Despite these findings, there is no mention of cryptocurrencies or stablecoins in relation to financial crimes. The report identifies compliance with new regulations, predicting the evolution of financial crimes, technological backwardness, non-compliance risks, and lack of clear rules as the main challenges for combating financial crimes. Although crypto technologies are not included in the potential solutions listed in the report, they could potentially play a marginal role in improving efforts to prevent financial crime.
Crypto and Financial Crimes
While it is acknowledged that cryptocurrencies can be used by financial criminals, their role in actual financial crimes is currently insignificant or even irrelevant. Cryptocurrency transactions leave public traces, making it difficult to hide from law enforcement. In fact, many thefts against crypto platforms have been traced back to the culprits and the stolen assets recovered. It is possible that the role of cryptocurrencies in financial crimes may increase over time, but for now, they do not pose a significant risk.
Tether’s Response
The CEO of Tether, Paolo Ardoino, responded to the Nasdaq report by emphasizing the need for multilateral cooperation to combat financial crimes. Tether is proud of its collaboration with law enforcement agencies worldwide and leverages the transparency of blockchain transactions to freeze addresses and wallets involved in criminal activities. Tether commits to continue working with law enforcement and calls on existing financial institutions to do their part in stopping destructive financial crimes.
Hot Take: The Role of Crypto in Financial Crimes
The recent Nasdaq report highlights that cryptocurrencies, including stablecoins like Tether (USDT), have minimal impact on global financial crimes. Despite concerns about the association between crypto and illicit activities, the report reveals that illicit funds mainly originate from traditional sources such as drug trafficking and human trafficking. While cryptocurrencies can be used by criminals, their traceability and public nature make them less effective for hiding illegal activities compared to traditional fiat currencies. The report underscores the importance of multilateral cooperation and emphasizes that no single company or technology can solve the problem alone. With ongoing collaboration between cryptocurrency projects like Tether and law enforcement agencies, efforts to combat financial crimes can be strengthened.
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