Nasdaq's Global Financial Crime Report: $3.1 Trillion in Illicit Funds Circulated in 2023

Nasdaq, the prominent stock exchange company, has unveiled its inaugural Global Financial Crime Report for 2024, shedding light on the state of financial crime in the past year. The report's conspicuous omission of cryptocurrencies like Bitcoin ($BTC) reinforces the belief that traditional cash (fiat) remains the primary choice for criminal activities.

A Multi-Trillion Dollar Issue

Nasdaq's report underscores the persistent challenge posed by financial crime, describing it as a "multi-trillion-dollar problem." In 2023, the report estimates that approximately $3.1 trillion in illicit funds coursed through the global financial system, driven by money laundering activities, which, in turn, fueled crimes such as human and drug trafficking, as well as terrorist financing.

Breakdown of Illicit Funds

Among the staggering trillions in illicit funds, Nasdaq identified $782.9 billion linked to drug trafficking, $346.7 billion associated with human trafficking, and around $11.5 billion allocated for terrorist financing. Additionally, the report reveals that $485.6 billion was lost due to fraudulent schemes and bank fraud in 2023.

The Role of Financial Institutions

Adena Friedman, Chair and CEO of Nasdaq, emphasized that financial institutions have been at the forefront of addressing this issue for decades. She highlighted their continued efforts in the fight against fraud. However, Friedman stressed that they cannot tackle this challenge in isolation, signaling the need for collaboration and multilateral efforts.

Tether CEO's Concerns and Call for Cooperation

Tether CEO Paolo Ardoino expressed alarm at the staggering scale of financial crime, underscoring the impossibility of any single company resolving this issue. Ardoino emphasized that only through collaborative efforts across the industry and with law enforcement agencies can they hope to thwart illicit activities. Tether remains committed to working with law enforcement to freeze addresses and wallets linked to criminal actions and called upon traditional financial institutions to join in these efforts.

Stablecoins in the Spotlight

A recent report from blockchain analytics firm Chainalysis highlighted stablecoins as the "cryptocurrency of choice" among criminals in 2022 and 2023, with their illicit transaction volume surpassing that of Bitcoin, Ether, and other altcoins. Meanwhile, Gabor Gurbacs, Director of Digital Assets Strategy at VanEck, noted the absence of Bitcoin, crypto, and stablecoins in the Nasdaq report. He emphasized that banks and institutions remain the primary conduits for criminal activities.