Are Cryptocurrencies the Source of All Evil?

When you examine the statements of US politicians regarding cryptocurrencies, you would think they are talking about a terrorist organization. According to them, cryptocurrencies are the source of all the world’s evil and are responsible for financing all kinds of crimes. In short, they argue that many problems will be solved if crypto ceases to exist. But is that really the case?

The Fed and Million-Dollar Penalty

We have previously discussed various crimes, ranging from money laundering to the abuse of authority, using examples from traditional financial institutions. In doing so, we mentioned that the bad examples in crypto are unique to humans.

The Federal Reserve and the New York Department of Financial Services (DFS) have imposed a $29.5 million fine on Metropolitan Commercial Bank for violating the Bank Secrecy Act, alleging that the bank allowed/facilitated $300 million in erroneous transfers. According to DFS, the bank provided the MovoCash digital prepaid Visa card program to malicious individuals in 2020 because it lacked a sufficient verification process to reveal the applicants’ true identities.

Thieves who registered on the platform with fake identities redirected numerous payroll payments and government aid to themselves. In other words, MCB failed to prevent a massive fraud in the MovoCash prepaid card program and allowed malicious individuals to exploit the financial system.

Over $300 million in pandemic relief and other payments fell into the hands of scammers. The Fed is now forcing MCB to improve its customer identification, customer status determination, and third-party risk management programs.

Is the Problem with Cryptocurrencies?

MCB is already a $6.7 billion institution, with most cryptocurrencies having a market value greater than its assets. In fact, if we consider its assets such as DeFi TVL, Maker, excluding Lido, surpasses the entire platform in terms of total locked value. So, what has this “regulated” and “US-interest-serving” institution done? It has fallen into the hands of the Fed for the crime of “weak KYC,” which necessitates waging war against crypto exchanges.

So, is the problem really with cryptocurrencies? We mentioned that US politicians use bad examples in crypto to wage war against the entire industry. In that case, shouldn’t they say that existing banks are at the center of evil and the den of fraud? Is the exploitation of $300 million in government aid insignificant?

The problem is not with cryptocurrencies. The crime lies in the human factor, and there are also bad actors within the crypto industry. Just like the leaders of massive institutions that have been penalized for billion-dollar money laundering crimes, the criminals are to blame.

And cryptocurrencies are not the primary financial channel for crime. Just a few years ago, ISIS was selling slaves for $10,000. Those who handed over the green paper with Benjamin Franklin’s portrait bought slaves for amounts like $10,000. ISIS did not conduct slave sales with Dogecoin or Ethereum.