Crypto walks a fine line
The enormous and growing cost of misconduct by cryptocurrency and digital payments companies goes beyond the billions they're paying in fines.
The frontier financial universe of fintechs and cryptocurrencies delivered a stunning result last year: these sectors topped old school 'TradFi' sector in value. Unfortunately that was in the value of fines paid for misconduct, according to the Financial Times.
The FT said crypto and digital payments companies paid $US5.8 billion ($8.7 billion) in fines in 2023 for shortcomings in customer checks and anti-money laundering controls, as well as for failing to uphold sanctions and other financial crime issues.
That figure included the $US4.3 billion penalty against crypto exchange Binance — a world record conduct fine — and dwarfed the $US835 million paid by traditional financial services groups.
Conduct costs are the great hidden expense for organisations — whether it be the hundreds of billions of fines levied on financial institutions after the financial crisis, the hundreds of millions on Australian banks and life insurance companies after the Royal Commission, or run-of-the-mill penalties in the hundreds of thousands that ASIC is hitting organisations with all the time.
