Money Laundering: Traditional Banks Vs. Cryptocurrencies

Money Laundering: Traditional Banks Vs. Cryptocurrencies

The threat of money laundering is a fear for financial institutions and governments world-over, and this fact has existed for centuries. Money laundering may not be the oldest crime in the book, but it sure does come close. Some historians have dated money laundering as far back as 2000 years ago in China. Though money laundering is clearly an old phenomenon, the tricks and methods used to conduct it are ever-evolving, so governments and financial institutions across the globe are constantly on their toes, trying to preempt and prevent these illicit financial transactions from occurring. In the digital age, this challenge is bigger than ever before — with new payment methods such as e-wallets, net banking and online transactions coming into play.

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Cryptocurrencies Are A Challenge To Anti-money Laundering Bodies

The biggest challenge, or rather what is perceived as a great challenge, to anti-money laundering (AML) bodies though has been the innovation and rise in Cryptocurrencies in the recent past. Many governments have expressed apprehensions about the use of Cryptocurrencies due to the fact that they appear to be unregulated and pose a higher perceived risk for money laundering and other illegal financial activities.

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So are cryptocurrencies actually more conducive to money laundering than traditional financial institutions? Tookitaki, a RegTech firm that builds aml software, sought to answer this question. They have gathered a list of the biggest cases of money laundering on record in the USA over the past decade. Their analysis has split up the cases based on financial institutions/ banks and cryptocurrencies to give a comparative view of the two platforms in a quantitative manner.

What’s interesting to see is that while the most money laundered through a traditional financial institution -- Waschovia Bank, amounts to $390 Billion, the highest amount of money laundered using cryptocurrencies in the past decade is a meager $177 million. Tookitaki’s analysis also mentions that the total amount of money laundered by traditional banks is about $2 Trillion per year. The total amount of money laundered per year through cryptocurrencies -- which is an estimated $2.8 Billion -- doesn’t really stack up.

It seems that the numbers prove that the assumption of cryptocurrencies being unsafe in comparison to traditional banks may be deeply flawed. Take a look at the complete infographic below to learn more:

Money Laundering

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Jacob Wolinsky is the founder of, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at) - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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