Crypto Becomes A Black Goat By The SEC And The Fed, This Is According To Stuart Alderoty

The US Federal Reserve and SEC financial institutions are accused of scapegoating crypto. (Photo; Doc. Tech Adventure)

JAKARTA - Ripple, the giant cross-border payment company based on blockchain, is again in the spotlight over the sharp criticism raised by Stuart Alderoty, Ripple's Chief Legal Officer (CLO) of financial regulators in the United States.

Alderoty accused institutions such as the Securities and Exchange Commission (SEC) and the US Federal Reserve of using crypto as scapegoats on money laundering issues, while traditional banks remained protected despite being involved in a similar scandal.

This criticism highlights the difference in treatment of the crypto industry and conventional financial institutions that are more established, although the contribution of money laundering in the two sectors is not comparable.

Alderoty in his post on platform X (previously known as Twitter) said that the claim of money laundering is a crypto problem is not true. He highlighted that the New York Federal Reserve itself was involved in the transfer of hundreds of millions of dollars worth of money (approximately IDR 1.6 trillion), but did not face the same criticism as crypto.

"Some people say money laundering is a crypto problem. That's not true. Just ask the New York Federal Reserve, which let hundreds of millions of dollars just escape," wrote Alderoty.

In addition, pro-crypto attorney John Deaton, who recently won the Republican preliminary election in Massachusetts, also criticized Senator Elizabeth Warren for publicly attacking the crypto industry. In an interview with WBUR, Deaton confirmed that only less than 1% of Bitcoin transactions and other cryptocurrencies were used for illegal activities, much lower than transactions in traditional banking sectors.

Data from the United Nations Office on Drugs and Crime (UNODC) shows that major US banks, such as HSBC, JPMorgan, and Bank of America, are involved in money laundering of between US$800 billion and US$2 trillion (between Rp12,800 trillion to Rp32,000 trillion) annually.

Deaton highlighted how conventional financial institutions often escaped strict scrutiny, despite being involved in major cases such as HSBC that had laundered nearly $900 million for drug cartels.

Not only that, a number of crypto figures have also criticized US senator Elizabeth Warren who is anti-crypto and plans to fight the industry. Two crypto figures Anthony Scaramucci and Mark Cuban, see Warren as a hypocritic. Scaramucci even called Warren and Gary Gensler a "regulation crime axis" which continues to suppress the crypto industry without a clear basis.