Recently, Nasdaq published its Global Financial Crime Report for 2024, in which there is no mention of USDT (Tether), other stablecoins, or cryptocurrencies.
Many, including some prominent politicians in the USA, continue to associate the crypto world with financial crimes, but apparently the role of cryptocurrencies in the world of financial crimes is still decidedly irrelevant.
Nasdaq report: Tether and crypto out of financial crimes
The Nasdaq report is the first Global Financial Crime Report published by the American company.
Its purpose is to analyze and report the extent, scope, and impact of financial crime on human society.
The report is global, and therefore analyzes financial crime worldwide. It was created by Nasdaq and Verafin, in collaboration with Celent and Oliver Wyman, and includes a data model developed from public and private sources, as well as interviews with professionals in the fight against financial crime.
Verafin is a Nasdaq company that offers business solutions specifically for the management of financial crime: fraud detection and management, compliance and AML/CFT management, high-risk customer management, screening, sanctions management, and information sharing. Their platform is used by over 2,500 financial institutions worldwide.
Nasdaq, on the other hand, is the company that manages the homonymous US technology stock exchange.
The results of the Nasdaq report speak for themselves: cryptocurrencies and stablecoins like Tether (USDT) do not have an impact
The Global Financial Crime Report of 2024 reveals that in 2023, 3.1 trillion dollars in illicit funds and money laundering were identified globally. Furthermore, total losses due to fraud were estimated to be over 485 billion dollars.
To get an idea, the entire crypto market has a market capitalization of about 1.5 trillion dollars, and generates a daily trading volume of less than 100 billion. The same Nasdaq company has a market capitalization of about 33 billion dollars.
Out of the 3.1 trillion dollars of illicit funds that passed through the global financial system in 2023, nearly 800 billion were generated solely from drug trafficking. Another 350 billion were generated from human trafficking, and over 11 billion dollars from terrorism financing.
Among the other main threats listed in the report are real-time frauds, money laundering through money mules, frauds against states, scams against the elderly, scams against consumers, corporate frauds, and compromise of email addresses.
Among all these there is no trace of cryptocurrencies or stablecoins.
The main challenges identified for combating financial crimes are compliance with new regulations, predicting the evolution of financial crimes, the technological backwardness of some financial systems, the impact of potential non-compliance with compliance, and the scarcity of clear rules. Cryptocurrencies and stablecoins are also absent from this list.
Instead, among the potential solutions, particularly to improve efforts to prevent financial crime, although not having included crypto technologies, it is understood that these could have some kind of role, albeit perhaps marginal.
Crypto and financial crimes
It should be remembered, however, that cryptocurrencies, just like fiat currencies, are actually used by financial criminals, and it is also possible that their use in this field is increasing.
However, the numbers show how the actual and concrete use of crypto technologies for financial crimes has a decidedly minority role within the global landscape, if not even completely irrelevant.
It is possible that this role may further grow over time, but considering that cryptocurrency transactions leave public traces, no matter how anonymous or pseudonymous, they are certainly not the best way to hide from law enforcement.
On the contrary, for example, many of the thefts against crypto platforms have been traced back to the culprits, and in some cases, even to the recovery of the stolen goods. Perhaps cryptocurrencies create more opportunities than risks from this point of view.
The CEO of Tether, Paolo Ardoino, commented on the results of the Nasdaq report, saying:
“Today’s report highlighting the crisis of multibillion-dollar financial crime afflicting the world is incredibly alarming. We fully agree with the report’s statement that no company, industry, or technology can solve this problem alone and that only through multilateral cooperation will we be able to stop these illicit activities.”
Tether is proud of our ongoing collaboration with law enforcement agencies worldwide, leveraging the transparent nature of blockchain transactions to successfully freeze addresses and wallets involved in criminal activities, including those connected to individuals and entities listed on the OFAC SDN list.
Tether is committed to continuing our cooperative approach with law enforcement to stop destructive financial crimes, and we echo the requests contained in this Nasdaq report for existing financial institutions to do their part as Tether is doing.