Fiat Hypocrisy: Morgan Stanley Fined $10 Million for AML Compliance Failure

Apparently, accusers have forgotten that some of the most devastating crimes in history have been carried out via the fiat money system. In fact, some of them were executed directly within ‘trusted’ fiat financial institutions themselves. In 2009, Bernie Madoff, the former NASDAQ executive chairman, was convicted of operating the largest Ponzi scheme in history from directly within the stock exchange. The 2001 Enron scandal revealed rampant fraud and corruption within the energy commodity giant, resulting in not only bankruptcy but tremendous investor losses. Lender Fannie Mae settled a $400 million lawsuit in 2011 with the SEC for subprime lending fraud. And of course, the stock market crash of 1929 that triggered the U.S. Great Depression outdoes them all.

Fines at the Core

With a list like this, it should come as no surprise to learn that investment banking firm Morgan Stanley was fined $10 million by Wall Street’s Financial Industry Regulatory Authority (FINRA) for anti-money laundering (AML) compliance failures. https://twitter.com/iamjosephyoung/status/1078389619849232384 Crypto is not without its problems — it is not like fiat vs. distributed ledger money is the financial equivalent of good vs. evil. Fraud, corruption, and other forms of criminal activity have existed throughout modern history. However, let’s take a moment to remember a few of the more positive features cryptocurrency offers consumers. These advantages are simply not available within the fiat system.

Decentralization

Bitcoin and other cryptocurrencies are managed with blockchain technology. What this means is that there is no central governing body responsible for decision making and ensuring good financial practices. The potential for not only human error, but also human corruption, is greatly reduced to a negligible level. The decentralized nature of cryptocurrency also enables peer-to-peer transaction capabilities. This form of collaboration reduces costs and promotes trust within the system for all users.

Immutability

The blockchain concept of immutability is also a key feature of cryptocurrency. This basically means that anything added to the distributed ledger is permanent. It cannot be altered, removed, or revoked. Because all users have access to all data and can be confident in the accuracy of that data, immutability makes blockchain technology invaluable for nearly any financial use case.

Other Practical Advantages

These are not the only features that cryptocurrency offers the world. High levels of security coupled with relative user anonymity are also key benefits. The public key system of Bitcoin (BTC) and other platforms is really more pseudonymous than anonymous, but the right to privacy in relation to financial transactions is still better protected within a blockchain than a traditional banking establishment. Additionally, cryptocurrency has the potential to become a universally recognized medium of exchange. It operates outside the typical exchange rates of traditional fiat currency. Furthermore, crypto gives over 2.2 billion underbanked individuals the opportunity to access a reliable currency system. Many people within the underbanked population live in developing countries. Therefore, selecting a currency that exists outside of potentially chaotic and unreliable government structures is an appealing option. Cryptocurrency is most certainly not without fault, as evidenced by the absolutely terrible year the crypto world has endured over the past twelve months. Hundreds of ICOs have been outed as frauds, with investors losing millions. Infighting related to hard forks and other operational issues has run rampant. Crypto has endured crushing regulatory scrutiny. All of this has happened as Bitcoin experienced one of the worst bubble bursts of all time. However, the assumption that bad behaviors such as these are limited to cryptocurrency is absurd. Crypto was developed with the goal of being a better financial exchange mechanism. It is not without its issues, but it offers greater potential for improvement than has ever been possible within fiat banking. Do you think the negative news about crypto is legitimate? Is it just fear, uncertainty, and doubt (FUD) from the establishment? Let us know in the comments below!