Crypto Is Tightening Up Its Anti-Money Laundering Game, While Banks Are Still Being Fined for Non-Compliance

For anyone who's ever noticed the sheer abundance of news stories about crypto's apparent problem with money laundering, this may come as a shock, yet a deeper inspection of recent history reveals that the traditional financial world has just as serious a problem with laundering as crypto, if not a more serious problem.

What's particularly interesting about the issue of money laundering is that, while the cryptocurrency industry is rapidly tightening up its own codes and conduct, the established financial industry still seems stuck on a plateau of underlying illegality, despite its vastly superior position and resources.

Crypto exchanges are increasingly observing Know Your Customer and AML regulations, while new trade bodies are being established with the aim of erecting self-regulatory guidelines for the crypto industry to follow.

Such violations already present the non-crypto financial industry in a poor light, yet if there were any doubts that the non-crypto world isn't at least as poor at AML compliance as the crypto world, numerous other episodes throughout 2018 would dispel it.

In December, Latvia's financial regulator levied a 1.2 million euro charge on BlueOrange Bank for AML noncompliance, while FINRA fined Swiss bank UBS $5 million for similar violations.

First of all, there have been far fewer cases of fines for AML and KYC violations, with crypto exchanges doing much less to attract the attention of authorities than major international banks.

The Korean Blockchain Association revealed its rules - including provisions for Anti-Money Laundering - in April, while the South African Reserve Bank announced in the same month that it would be launching a self-regulatory body to oversee the country's crypto industry and to ensure that cryptocurrencies didn't undermine financial stability and observance of financial laws.

Seeing as how crypto has hardly been called out by regulators to the extent that big international banks have, it's arguable that additional legislation and monitoring isn't really necessary, although it will be an important step in reassuring the general public that cryptocurrencies aren't the shady underworld that the mainstream media likes to paint them as being.

It's an interesting story in its own right as to why, when "Reputable" banks like Morgan Stanley, UBS and Société Générale are being fined left, right and center, it's the comparatively small cryptocurrency industry that's attracting most of the world's glare as an alleged sanctuary for rogues and criminals.

Given the speed with which crypto exchanges have taken to licensing and to self-regulation, and with which they've sought to demonstrate their compliance with AML legislation, it's only a matter of time before the financial industry will have to look elsewhere for scapegoats.