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Ripple Labs’ Chief Legal Officer, Stuart Alderoty, has slammed U.S. regulators for unfairly targeting the cryptocurrency industry in money laundering investigations while allowing traditional banks to slip under the radar.
In a recent X <a href="https://x.com/s_alderoty/status/1833249313369297255" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="external">post</a>, Alderoty pointed to the New York Federal Reserve’s reported role in enabling large-scale illicit transfers, including those tied to terrorist groups, as evidence that crypto is not the primary culprit.
<h2 id="iraqi-banks-reportedly-used-fed-system-to-launder-money">Iraqi Banks Reportedly Used Fed System to Launder Money</h2>
His criticism follows a Wall Street Journal (WSJ) <a href="https://www.wsj.com/politics/national-security/iraq-banks-u-s-fed-iran-financing-0c3e740c?st=69x67qjszyqgo68" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="external">story</a>&nbsp;that exposed significant gaps in the New York Fed’s anti-money laundering measures.
The article revealed that over several years, some Iraqi financial institutions, including those owned by a banker named Ali Ghulam, illegally moved billions of dollars using the Fed system. Some of the money is suspected to have been channeled to Iran’s Islamic Revolutionary Guard as well as several militia groups linked to it.
While U.S authorities have moved to block the offending banks, the WSJ report claimed the Fed only acted after more than a decade of negligence, even after receiving warnings from the Pentagon about the illicit financial activities.
With such cases as proof, Alderoty argued that agencies like the Securities and Exchange Commission (SEC) and the U.S. Federal Reserve have unfairly scapegoated crypto while turning a blind eye to much larger infractions in the traditional banking sector.
<h2 id="less-than-1-of-crypto-transactions-linked-to-illegal-activities">Less Than 1% of Crypto Transactions Linked to Illegal Activities</h2>
His concerns echo those of other crypto advocates, such as pro-XRP lawyer John Deaton, who previously&nbsp;<a href="https://x.com/JohnEDeaton1/status/1833298062724215115" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="external">shared</a> striking statistics showing that less than 1% of crypto transactions are tied to illicit activities. In comparison, between $800 billion and $2 trillion is reportedly laundered annually through the traditional financial system,&nbsp;according to data from the UN Office on Drugs and Crime.
The Republican <a href="https://cryptopotato.com/pro-ripple-xrp-lawyer-john-deaton-will-face-off-against-dem-sen-elizabeth-warren/" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="internal">candidate</a> for the Massachusetts senatorial seat also pointed to reports that major banks, such as HSBC, JPMorgan, and Bank of America, have been involved in <a href="https://www.icij.org/investigations/fincen-files/hsbc-moved-vast-sums-of-dirty-money-after-paying-record-laundering-fine/" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="external">laundering</a> millions for drug cartels and other illegal operations.
Despite such information, the focus of U.S. regulators remains on crypto, with the authorities going as far as blaming last year’s bank failures on digital assets in a move labeled Operation <a href="https://cryptopotato.com/crypto-leaders-call-out-white-house-for-claiming-chokepoint-2-0-isnt-real/" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="internal">Choke Point 2.0</a>.
In a past <a href="https://www.bloomberg.com/news/videos/2024-09-06/ripple-ceo-sees-opportunities-for-stablecoin-in-japan-video" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="external">interview</a> with Bloomberg, Ripple CEO Brad Garlinghouse shared those sentiments, stating that the U.S. government’s antagonism towards crypto has had a damaging effect on the industry’s growth.
The post <a href="https://cryptopotato.com/ripple-clo-criticizes-us-regulators-for-using-crypto-as-scapegoat-in-money-laundering-scandals/" rel="noopener noreferrer nofollow">Ripple CLO Criticizes US Regulators for Using Crypto as Scapegoat in Money Laundering Scandals</a> appeared first on <a href="https://cryptopotato.com/" rel="noopener noreferrer nofollow">CryptoPotato</a>.

Ripple CLO Criticizes US Regulators for Using Crypto as Scapegoat in Money Laundering Scandals

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