The usual narrative that Bitcoin is money made for crime seems to be running out of arguments.
A recent reportThe report by none other than the National Association of Securities Dealers Automated Quotation (NASDAQ) demolishes the idea that Bitcoin is the currency of criminals.
But before I offer you some key facts from the report, let me give you some context....
What is NASDAQ?
NASDAQ is the second largest electronic stock exchange in the world, after the New York Stock Exchange (NYSE), United States. It is known for being home to biotechnology, telecommunications, retail and wholesale companies; such as Apple, Microsoft, Amazon, Facebook and Google.
Nasdaq refers to both the stock exchange and its main index, an important term in financial jargon, especially for those who follow the technology sector. Source: Bankrate.
The stock market has its own indexes, such as the Nasdaq Composite, which reflects the performance of the more than 3,000 companies listed on it. Often, the term Nasdaq is used as a synonym for that index.
The Nasdaq Composite is one of the most popular and widely followed indexes in the world, a barometer of the health of the U.S. economy, especially the technology sector. Source: Google.
Now that you have context and an idea of what NASDAQ stands for, here are some key points about the aforementioned report:
1 Dirty Money in Dirty Banks
In 2023 alone, a whopping USD$3.1 trillion in illicit funds flowed through the traditional financial system. They don't say so because it doesn't suit them, which highlights the sheer magnitude of money laundering happening right under our noses, not in some obscure crypto corner.
Global distribution of illicitly transacted funds in the traditional financial system. Source: Nasdaq.
2 Fiat money fuels crime.
It is no secret that this illicit flow finances a series of atrocious activities, such as drug trafficking (USD $782.9 billion), human trafficking (USD $346.7 billion) and even terrorism (USD $11.5 billion).
Nearly USD $1.14 billion has financed a series of atrocious activities. Source: Nasdaq._
3 Bitcoin? Not even mentioned
Significantly, the Nasdaq report does not mention Bitcoin even once. This disproves the myth that Bitcoin is the main tool for money laundering.
4 Ineffective Meters
The report exposes a startling truth: **there are no commensurate gauges to track the effectiveness of the current "know your customer" and anti-money laundering (KYC/AML) programs. Indeed, regulators routinely force financial institutions to implement costly KYC/AML policies without even knowing if they work.
The report revealed a lack of successful KYC/AML policy measures. Source: Nasdaq
5 Costly and inefficient policies
"Surveillance charade" is a term used to describe the practice of monitoring or surveillance of people covertly or without their consent. As such, it is used to criticize the invasion of privacy and loss of freedom.
Thus, the above lack of measurement suggests that regulators may know that these policies are ineffective. Indeed, research by Ronald Pol, an AML and financial crime expert with a PhD from the University of Glasgow, suggests that current anti-money laundering policies are costly and profoundly ineffective.
?For Ronald Pol, Anti-Money Laundering policies may be the least effective anti-crime experiment in the world. Source: @ronaldpol on X._
All of the above leads us to think that the real surveillance charade lies in the fact that the ineffective KYC-AML measures fail to stop the big money launderers. Meanwhile, they inconvenience ordinary citizens and hide the lack of real action against large-scale money laundering in the traditional financial system.
¿A broken system?
The unwillingness to measure effectiveness suggests fear of admitting the truth: the current system is failing. Indeed, the emphasis on warrantless surveillance, built on the illusion of effectiveness, could crumble if the truth is revealed.
The traditional system is broken, but there is a lack of real political, social and moral will to implement solutions. Source: 123RF.
This Nasdaq report is a wake-up call. The real money laundering problem lies in the traditional financial system. It is true that bitcoin and other cryptocurrencies present some money laundering risks, but, as the Nasdaq report suggests, they are not the main culprits.
The ideal solution might be a two-pronged approach:
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Reform the KYC/AML system: streamline the process for ordinary users while at the same time implementing more stringent measures to detect complex laundering schemes.
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Focus on law enforcement: Invest in better investigative tools and international cooperation to crack down on large money laundering operations, which often occur through traditional banks.
En mi opinión, la atención debe centrarse en reevaluar nuestro enfoque de la delincuencia financiera, reformar el sistema financiero tradicional y avanzar hacia soluciones que sean realmente eficaces, como mejorar la forma de rastrear y prevenir las actividades financieras ilícitas a gran escala.
Sin embargo, las líneas anteriores suenan muy bonitas y parecen un sueño, una utopía, porque la verdad es que faltaría una verdadera voluntad política, social y moral para poner en marcha las soluciones. Mientras, yo apuesto a un actor descentralizado y disruptivo que ya conoces de sobra: Bitcoin.