Brian Armstrong, CEO of Coinbase, has criticized America’s current Anti-Money Laundering (AML) regulations, labeling them as an economic disaster. He stated that these regulations drain $213 billion from the global economy annually, all the while failing to effectively combat criminal activity.
Brian referenced a report from the United Nations, which revealed that a mere 0.2% of illicit transactions are detected. In a witty remark, he suggested that Elon Musk’s Department of Government Efficiency (D.O.G.E) could potentially tackle this issue.
He exposed the underlying cause of the prevalent “debanking” trend: regulators have shifted the responsibility of enforcing anti-money laundering laws to financial institutions. Banks face substantial fines in the millions or even billions if they make any mistakes. Consequently, financial institutions have become overly cautious, driving legitimate businesses and individuals out of the banking system altogether.
Crypto industry unites against US debanking
As reported recently, Charles Hoskinson, co-founder of Cardano and Ethereum, has also raised concerns about the coordinated crackdown on cryptocurrency. He took to social media to alert the community about the severity of the situation.
“Many individuals have overlooked the issue for political reasons,” he stated. “The situation is more dire and expansive than anticipated. Numerous businesses have faced harassment, fines, audits, and de-platforming.”
Charles drew parallels between the current scenario and Operation Chokepoint 2.0, a modern version of the controversial program from the Obama era that targeted industries deemed high-risk. While the previous focus was on payday lenders and firearms dealers, today it is blockchain companies.
Despite the official end of Operation Chokepoint in 2017, insiders in the crypto space claim that it was resurrected in 2021, now targeting the growth of decentralized finance (DeFi).
Gabriel Abed, chairman at Binance, shared his own disturbing experience. His accounts at First Citizens Caribbean Bank, which he had maintained for over a decade, were suddenly closed. The reason cited was a deposit related to Bitcoin.
Abed mentioned that the bank’s CEO confessed they were concerned about jeopardizing their relationships with American correspondent banks. Global banks are cutting ties with cryptocurrency firms to adhere to the “standards” set by their U.S. counterparts.
Charles urged the community to come together and advocate for legislative changes. “We have a limited timeframe to enact new laws,” he cautioned.
From Zero to Web3 Pro: Your 90-Day Career Launch Plan