Banks Launder $2.7 Billion Every Day, Crypto Exchanges $9 Million in Two Years

Banks Launder $2.7 Billion Every Day, Crypto Exchanges $9 Million in Two Years

Earlier this month, Danske Bank, the biggest bank in Denmark, faced its largest scandal to date for laundering more than $230 billion. Despite the billions of dollars banks launder on a daily basis, critics are still focused on crypto exchanges.

On Sept. 28, Erik Voorhees, the CEO of popular cryptocurrency exchange ShapeShift, responded to the coverage of WSJ which compared the amount of money laundered by banks and crypto exchanges over the past two years. In the last 24 months, banks have laundered $2.7 billion every day while crypto exchanges have allegedly processed $9 million in illicit funds.

$2.7 billion times 730 days (two years) is equivalent to $1.97 trillion, or $1,971,000,000,000. Banks are said to have laundered $1.97 trillion in the past two years by laundering $2.7 billion on a daily basis.

In contrast, crypto exchanges have laundered $9 million in the entire period of two years, meanwhile banks laundered $1.97 trillion.

Is it an Issue of Money Laundering or Establishing a Narrative?

Based on the numbers alone, it is fairly evident that the problem lies in the institutions that are laundering $1.971 trillion in every two years rather than organizations that allegedly launder $9 million in 48 months.

Hence, if the concern of money laundering in the crypto market was really about the problem of funneling illicit funds, then the focus of government agencies and the media has to be established on banks.

Last week, it was revealed that the biggest commercial bank in Denmark laundered $230 billion in Estonia.

Danske Bank former Chief Executive Thomas Borgen, who resigned immediately after the scandal, said:

“It is clear that Danske Bank has failed to live up to its responsibility in the case of possible money laundering in Estonia. I deeply regret this.”

Karel Lannoo, the CEO of Center for European Policy Studies, a Brussels-based think tank, stated that the proportion of the scandal is so large that it may single-handedly harm the reputation of the country, which has been acknowledged as not of the cleanest in the world.

“This is a scandal of enormous proportions. We are talking about a country that has the reputation of being one of the cleanest in the world. And this is their largest bank.”

Yet, less than two weeks after the biggest scandal in the history of Denmark, the focus on money laundering has somehow shifted to crypto. A WSJ investigative report revealed that ShapeShift laundered a grand total of $9 million in the past two years, which has not been conclusively proven.

But, assuming that ShapeShift did process $9 million in illicit funds, it is nowhere close to the amount of money laundered by banks on a daily basis.

The WSJ reported:

“A parade of suspected criminals has taken advantage of ShapeShift’s services since the exchange began in 2014, according to law-enforcement officials, independent researchers and the Journal’s investigation.”

Crypto is Criminal Money

The narrative of critics against cryptocurrencies since the beginning was that it is the go-to form of money for criminals. However, as Europol recently disclosed, cash remains as the dominant money laundering tool amongst criminal groups, because of its anonymity.

Cryptocurrencies by nature, contrary to most reports, are not anonymous. Bitcoin wallets and transactions, for instance, can be tracked using a block explorer and even with mixing tools in place, startups like Chainalysis have developed sophisticated tools to untangle transactions.

Cover Photo by chrissie kremer on Unsplash

Posted In: , Adoption, Analysis, Scams
Invest with AMFEIX

Like what you see? Subscribe to CryptoSlate

Get our daily newsletter containing the top blockchain stories and crypto analysis straight to your inbox.

Sign up to stay informed
Joseph Young

Joseph Young

Analyst @ CryptoSlate

Joseph Young is a finance and tech journalist. He has worked with leading media and news agencies in the technology and finance industries, offering exclusive content, interviews, insights and analysis of cryptocurrencies, innovative and futuristic technologies.

View author profile

Disclaimer: Our writers' opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.