Richard Teng, the Chief Executive Officer of Binance, the world's largest cryptocurrency exchange, has challenged the criticism from major traditional banks regarding cryptocurrency's involvement in illicit activities. According to Teng, data suggests that fiat currency, such as the U.S. dollar, is more extensively used for illegal purposes. His remarks followed comments made by JPMorgan Chase Chairman and CEO Jamie Dimon during a Congressional hearing where he claimed that crypto enables malicious actors to bypass anti-money laundering protocols and sanctions.
Teng stated: "You have seen bankers advocating shutting down crypto industry because of illicit activities. But let’s look at facts."
During an oversight hearing, Senator Elizabeth Warren (D-MA) questioned Dimon about the use of cryptocurrency by North Korea and Hamas. In response, Dimon expressed his deep opposition to cryptocurrencies like Bitcoin, which he described as tools for criminals, drug traffickers, and tax evaders. He further stated that if he were in government, he would shut the crypto industry down.
Teng referred to an analysis by Dr. Andrzej Gwizdalski from the University of Western Australia who compiled data from various sources, including the United Nations and World Economic Forum. Gwizdalski pointed out: "Perspective is crucial when addressing illicit financial activities. Traditional fiat, like the USD, is implicated in an estimated $3.2 trillion in illegal activities annually—over 100 times the $20 billion linked to cryptocurrencies."
Gwizdalski emphasized that due to blockchain's transparent and immutable nature, using crypto for illicit activities is "inherently risky" and unwise. He advised policymakers working on crypto regulations to be "well-informed and address real issues within their traditional systems."
Dan Held from Trust Machines criticized Senator Warren for allegedly spreading false information about the use of crypto by Hamas and North Korea as a basis for her money laundering bill, which could "effectively ban crypto in the United States."
Norbert Michel, Vice President and Director of the Cato Institute’s Center for Monetary and Financial Alternatives, accused Warren of using Hamas as a pretext to advocate for her Digital Asset Anti‐Money Laundering Act. He argued that Warren's claims about crypto's role in terror financing do not "withstand scrutiny" and highlighted that criminals also use the U.S. dollar and other financial instruments.
Michel further criticized Warren's Digital Asset Anti‐Money Laundering Act for potentially making it more difficult for law-abiding citizens to use crypto. He suggested focusing resources on apprehending terrorists rather than imposing "costly" and "inefficient" regulations on private businesses.
The Treasury Department's report "National Strategy for Combating Terrorist and Other Illicit Financing" found that most terrorist organizations "primarily rely on the traditional financial system and cash to transfer funds."
