For years, financial crime has loomed over cryptocurrencies, often painted as the haven for illicit actors. However, a new report by Nasdaq throws a curveball, revealing that the true hotbed of illegal activity lies surprisingly closer to home: traditional banks.
$3T in Illicit Funds
The report, “Global Financial Crime Report,” revealed that the world’s financial system is riddled with crime, with banks being the biggest culprits.
According to the report, over $3 trillion in illicit funds flowed through the financial system in 2023, with drug trafficking, human trafficking, bank fraud, and terrorist financing being the top sources.
Per the findings, $782.9 billion of the total figure stemmed from drug trafficking, $346.7 billion from human trafficking, $11.5 billion from terrorist financing, and $485.6 billion from various fraud scams and bank fraud schemes. Notably, there was no mention of Bitcoin (BTC) or other cryptocurrencies.
A Tip of the Iceberg
According to Nasdaq, these figures are only the tip of the iceberg, as many financial crimes are not reported or discovered.
“The true scale cannot be accurately measured in numbers, given how much crime goes unreported by victims and undetected in the current financial system,” the report said.
Nasdaq CEO Adena Friedman warned that the financial system is at risk if financial institutions, governments, and law enforcement do not adequately tackle these crimes.
Nasdaq surveyed 209 anti-financial crime professionals from banks and non-bank institutions in North America, managing assets between $10 billion and over $500 billion.
Banks Are the Culprits, Not Crypto
This revelation might surprise many, given the constant scrutiny and suspicion directed towards crypto as a facilitator of criminal activity. While the decentralized nature of crypto poses challenges in tracking illicit transactions, the Nasdaq report suggests that traditional financial institutions, with their established infrastructure and complex networks, might be creating a more fertile ground for criminals.
