The Epstein files. I still wonder if what Donald Trump fears most that Epstein investigation documents will reveal is money laundering by him and his friends. I could be all wrong. But we’ll know in two weeks (Dec.19). Or will we?
Rep. Sean Casten (D) of Illinois (IL-6) elaborates on a New York Times story (gift link) on how cryptocurrency enables money laundering.
When the House and Senate marked up stablecoin legislation, we raised all of these concerns – their anonymity, their nearly perfect design for money laundering. All the barn doors were left wide open. It’s used for crime because that is its purpose. www.nytimes.com/2025/12/07/t…
The term “stablecoin” itself is misleading. These aren’t coins nor are they stable. They are a bit of computer code that you can buy for a dollar and gives the owner title to a dollar but can be infinitely and instantly transferred to any computer on the planet.
If you want to understand the problem with that, go watch literally any movie about money laundering. The bad guys need to transfer money but our banking system tracks dollar transfers. So they buy jewelry, or gold bars, or German bearer bonds and physically sneak that bulky thing through customs.
If you felt sorry for all the work our criminals went through, I would challenge you to come up with a BETTER work around than stablecoins. Click a button, transfer the code, sell your code for dollars, presto: money laundered.
I say they aren’t stable because for all of that to work, the issuers of the stablecoin have to have a robust, audited reserve of dollars to pay out when a claim comes in and the GOP blocked all our amendments to require audits and hold reserves in insured accounts. BUT…
Having sent a crappy bill to the Senate the Senate – per tradition – made our bill worse by adding a provision that says that in the event of a run on a bank holding stablecoin deposits, those deposits have a senior claim, above those of law abiding citizens in insured accounts.
IOW, rather than make stablecoins stable, the bill makes their inherent instability contagious, shifting their risk onto the larger banking system. It’s a direct wealth transfer from law abiding Americans to criminals.
You knew Casten would get there.
Going back to the movie references. It’s as if Chief Bogomil fired Axel Foley and then directed Taggart and Rosewood to force the Beverly Hills Savings & Loan to buy the drugs directly from Victor Maitland with customer deposits.
But it’s not a movie. There is a real life Victor Maitland here, who does not give a damn about the stability of the banking system but loves being able to facilitate money laundering. His kids are also in on the action. www.reuters.com/investigatio…
Before I wrap, let’s rebut a couple of the cryptobro nonsense that’s sure to pop up in the replies: 1) “You can’t use crypto to do blockchain” is not true as long as the system allows for anonymity, “mixers” (aka, digital money laundries) and chain-hopping.
(2) “regulators shouldn’t stop innovation”. There is no objection to innovation within the law. Innovation outside of the law is what Walter White did when he came up with blue meth. It ain’t good if it ain’t legal.
(3) “there are legitimate use cases for digital money”. OK fine. But with a HUGE caveat:
If industry and their legislative advocates refuse to craft rules so that crypto isn’t just a way to arbitrage existing money laundering rules while destabilizing our banks, one must conclude that the illicit “side hustle” is whole point.
All of which is to say that the problems flagged in that NYT article are not only predictable, but were predicted. They are on the record in our Congressional debates.
But Victor Maitland’s allies made the world easier for the world’s drug and child traffickers, terrorists and weapons smugglers with their eyes wide open. It’s going to get much worse until we have majorities who act more like Axel Foley and less like (pre-Breaking Bad) Jonathan Banks. /fin
Trump may or may not have fondled some of Epstein’s younger-side girls. He certainly has enough accusers among women. But abusing women has always seemed to be a Trump side hustle. Making money by crook is his principal obsession. Evidence is out there that he may have long used real estate to launder money for Russians.
Trump looked sideways at crypto at first. He prefers physical buildings he can point to and slap his name on. Then he flipped, or a switch did in his head. With cryptocurrencies he could make more with less of a paper trail. And here we are.
