TD₿: An Analysis of Bitcoin’s Use in Illicit Finance by Michael Morrell
TL;DR Identified cases of laundering through cryptocurrencies remain relatively small compared to the volumes of cash laundered through the traditional banking system.
Hey Bitcoiners,
On Tuesday, Wells Fargo was ordered to pay $3.7 billion for a litany of reasons including wrongfully foreclosing on homes, charging surprise overdraft fees, repossessing cars illegally, and unlawfully freezing customer bank accounts.
These actions impacted an estimated 16 million consumer accounts at the bank.
Director of the Consumer Financial Protection Bureau (CFPB), Rohit Chopra, had this to say about Wells Fargo, “Wells Fargo’s rinse-repeat cycle of violating the law has harmed millions of American families…This is an important initial step for accountability and long-term reform of this repeat offender.”
This fine just adds a few billion more to the total for Wells Fargo, which has paid $22,081,458,643 in fines for 229 offenses since 2000. This is an institution that’s infamous for its long history of criminal activity.
If you think this action will force Wells Fargo to change its unlawful ways, then you are sorely mistaken. It’s well-known that these megabanks actually budget for these kinds of fines. The bank prepares to be fined for its ongoing criminal behavior because this isn’t some one-off event, it is the result of a culture within the bank that seems incapable or unwilling to follow the law and do right by its customers.
Although $3.7 billion sounds like a lot of money, it is merely a slap on the wrist for this criminal enterprise that’s expected to bring in pre-tax profits of over $13 billion dollars in the first three quarters of 2022 alone.
This is what happens when corruption reigns supreme. Regulators are bought and paid for, and central banks (taxpayers) bail these banks out every time they need them to because they are considered “too big to fail.” Why would Wells Fargo begin abiding by the law when it is making money hand over fist, and there is zero real disciplinary action or accountability for its actions?
To give you a sense of how unethical and wicked this bank is, here’s a small taste of only some of Wells Fargo’s criminal activity in recent years:
September 2016 - $185 million for creating about 1.5 million unauthorized deposits and 623,000 credit card accounts in customers’ names without their knowledge.
September 2016 - $20 million in civil money penalties after Wells Fargo admitted it had illegally repossessed another 450 servicemembers’ cars.
July 2017 - Wells Fargo admits that it charged about 570,000 customers for auto insurance on car loans without verifying whether these customers already had existing insurance. As a consequence, up to 20,000 customers may have defaulted on their car loans.
October 2017 - Wells Fargo admits it wrongly fined 110,000 mortgage clients for missing a deadline, even though the delays were the bank’s fault.
May 2018 - Wells Fargo agrees to pay $480 million to settle a securities fraud lawsuit. Investors claimed the bank knew about the fake account issue but failed to disclose it to investors. It was discovered that leadership knew about the illegal practice dating all the way back to 2002.
July 2018 - Wells Fargo, CFPB, and OCC reach a $1 billion settlement of issues related to Wells Fargo’s auto-loan insurance and mortgage practices.
July 2018 - Wells Fargo refunded millions of dollars for charges related to add-on services, such as pet insurance and legal services, which it added onto customers’ accounts without the customers’ full knowledge.
August 2018 - Wells Fargo pays a $2.1 billion fine to DOJ for misrepresenting the type of mortgages it sold to investors between 2005 and 2007.
February 2018 - The City of Sacramento sues Wells Fargo, citing illegal practices that suppressed property values in “minority and low-income communities.” According to the city, black borrowers with FICO scores over 660 were three times as likely to get a high-cost or high-risk loan as a white borrower. This lawsuit is ongoing.
February 2020 - Wells Fargo agrees to pay $3 billion to resolve criminal and civil investigations into its past sales practices and creating fake accounts to the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC).
And on…and on…and on…it goes.
I bring this up because it is absolutely absurd that we have politicians like Elizabeth Warren trying to pass bills to stop criminal activity in Bitcoin when criminal activity is completely out of control at these megabanks.
If Warren actually cared about stopping financial crime or protecting retail investors, she would turn her focus on these banks that have been breaking the law seemingly non-stop for decades as they line their pockets with ill-gotten gains.
Not only that, but in comparison, the criminal activity that occurs in Bitcoin is negligible compared to what transpires within the traditional financial system. Don’t take it from me, take it from Michael Morrell, a man who enjoyed a 33-year career at the CIA.
Michael Morrell authored a report titled, “An Analysis of Bitcoin’s Use in Illicit Finance,” in which he wrote, “Identified cases of laundering through cryptocurrencies remain relatively small compared to the volumes of cash laundered through traditional methods.” (04/06/2021)
This is why Bitcoin was invented. To circumvent these institutions that have betrayed their clients’ trust time and time again and that act like they are above the law. They do not deserve to stay in business.
No amount of fines will stop these behemoth banks from acting against the best interests of their clients and society at large.
What will stop them is a new innovative technology that will render them obsolete.
Tick tock next block,
Sam Callahan
Sign up for Swan and receive $10 in free bitcoin today.
Quote of the Day
“The banks support criminal enterprise with trillions, yet Gov regulators want you to believe it’s Bitcoin that is enabling criminals.” - Mark Moss, Host of the Mark Moss Show and Author of the Uncommunist Manifesto
Job of the Day
Are you a Swan and love numbers? Then we’re looking for you! Swan is looking for a Staff Accountant to come on board and join our accounting and finance team. We’re looking for a Bitcoiner with 1-2 years of experience as an Accountant or Auditor. This position will be reporting to the Director of Finance and Accounting. Apply today!
Not your particular skillset? Check out all the Bitcoin jobs at bitcoinerjobs.com.
Featured Event
Thursday — come to Massadoption: a ‘Holiday’ Bitcoin Meetup in Framingham, MA, from 6:30-9:00 pm. Ugly holiday sweater attire is encouraged. No speaker or specific agenda other than celebrating and sharing gratitude with fellow Bitcoiners and ringing in holiday cheer!
Not in town for this? Check out all the Bitcoin events at bitcoinerevents.com.
Meme of the Day
(h/t @MemeingBitcoin)