Blockchain’s Perfect Storm: Removing Money Laundering from the Financial System

Blockchain’s Perfect Storm: Removing Money Laundering from the Financial System

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Today, banks and financial markets refuse to share information that can prevent money launderers and fraudsters from operating in the shadows, in the gaps between market participants. But now the situation is changing. As Grant Blaisdell, co-founder and COO of Coinfirm.io says: “Blockchain has the potential to completely eliminate fraud, money laundering and criminal activity from our financial and banking systems.” This is the first in a three-part report that looks at Anti-money laundering (AML) and the efforts of the Blockchain community to bring everyone together to rid the financial markets of fraudsters, criminals and those who seek to use the financial system for the bad ends. Compliance costs skyrocket Remembering back to 2012, HSBC had to pay the U.S. authorities $1.9 bln in fines for not identifying and distinguishing bad actors from good, through the handling of a huge volume of questionable transactions from unreliable sources. The question remains: did they really know or were the systems that are meant to flag the risks inadequate? How did HSBC get this so wrong over a long period across many sovereign jurisdictions? Does this continue to highlight the fundamental issue for banks and all financial institutions the challenge to accurately identify each party …