Sam Lyman, Director of Public Policy at Riot Platforms, a Bitcoin mining company, recently expressed his views on the use of cryptocurrency for money laundering. In a Jan. 22 post on X, Lyman stated that while cartels have indeed utilized cryptocurrency for such purposes, traditional banks have been used to launder significantly larger amounts. His comments were in response to U.S. Sen. Elizabeth Warren's (D-Mass.) remarks during a recent Congressional hearing.
"What she doesn't want you to know: In the years prior, the Sinaloa & Norte del Valle cartels laundered nearly $900,000,000 in fiat currency through HSBC," Lyman said. "That's a fiat to crypto ratio of 1,000:1" and emphasized that "Cash remains the preferred currency of criminals" and "when compared to crypto, it's not even close."
During a Senate Banking, Housing, and Urban Affairs Committee hearing titled "Stopping the Flow of Fentanyl: Public Awareness and Legislative Solutions" held on Jan. 11, Warren mentioned an instance where a member of the Sinaloa Cartel was indicted by the Department of Justice (DOJ) for laundering nearly $900,000 in crypto.
In 2012, HSBC Bank reached a deferred prosecution agreement with the DOJ wherein it forfeited $1.256 billion and acknowledged violations of several acts including the Bank Secrecy Act and International Emergency Economic Powers Act. The DOJ reported that HSBC had failed to maintain effective anti-money laundering protocols which led to approximately $881 million being laundered through HSBC USA by the Sinaloa Cartel of Mexico and Norte del Valle Cartel of Colombia.
Assistant Attorney General Lanny A. Breuer made a statement at that time stating: "HSBC is being held accountable for stunning failures of oversight – and worse – that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries, and to facilitate hundreds of millions more in transactions with sanctioned countries."
Norbert Michel, Vice President and Director of the Cato Institute’s Center for Monetary and Financial Alternatives, criticized Warren's stance on cryptocurrency. He suggested that Warren is using crypto's involvement in illicit activities as a pretext to advocate for her Digital Asset Anti‐Money Laundering Act. Michel further argued that Warren's claims about crypto's role in terror financing do not "withstand scrutiny" and pointed out that bad actors also use the U.S. dollar and other financial instruments to commit crimes.
Before his tenure at Riot Platforms, Lyman held positions as policy director for a Washington D.C. think tank and speechwriter for the CEO of the U.S. Chamber of Commerce. His work on politics and crypto has been featured in various publications including Fortune, Newsweek, and Forbes. When he was a graduate student at Princeton University, his research focused on the effects of emerging technologies on international relations.
