“If I was the government, I’d close it down.”
This is what JP Morgan CEO Jamie Dimon testified to Congress on Wednesday in a routine meeting about the banking industry. In the process, the topic of Bitcoin and other cryptocurrencies came up. Despite having significant investments in blockchain, Dimon has called bitcoin “a hyped-up fraud,”
Dimon is a consistent hypocrite regarding Bitcoin/crypto. If you ask me if Bitcoin should be banned due to claimed fraud activities, I think JP Morgan should be first to be banned as it has done far more illegal/fraud activities than bitcoin-related ones.
My friend happened to send me some interesting facts/stats about this. So let's see what is out there:
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Jamie Dimon was on his high horse yesterday talking about fraud and how only drug dealers and criminals use bitcoin and crypto. Let's talk about that very quickly.
You have to be a special kind of idiot to use bitcoin to commit crime. I'll tell you why.
The blockchain keeps track of every single transaction. If you look at every major theft of bitcoin that has occurred in the last 10 years, the FBI has caught every single one of those people, all of them. Only dumb criminals commit crime with bitcoin or state actors that are in a country where the FBI can't get them.
But even taking all that into consideration, less than 1% of all the activity on the bitcoin network is considered to be of an illicit nature. The last numbers I saw were around 0.3−0.35%.
The largest source of criminal activity happens in the banking system and in fiat currency, somewhere between 2−5%. Over $1 trillion of fraud occurs in paper money in the current banking system that has all these regulations attached to it.
Here we have one world that has no regulation. Bitcoin has zero regulation. And yet 0.3% of all the transactions are illicit. And we have this other world that's much bigger, this traditional banking system where 2−5% of all transactions are considered illicit.
The bankers do not want a fully transparent blockchain system because who do you think profits from over $1 trillion in illicit activities? How many banking fees do those banks take?
Do they give those banking fees back and clutch their pearls when they find out, “Oh my goodness, we were cleaning money for the Mexican mafia”? They pay a little fine and they move on.
That's the game. So sure, if I was in Jamie Dimon's shoes and I've made my billions on providing banking services to a captive audience, of course I'm going to say I hate bitcoin, it's terrible, and only criminals use it.
But when we look at the facts, we see that the real criminals are in the banking system.
Look at JP Morgan. JP Morgan has been fined $39 billion so far this century. Has there been $39 billion of outright fraud in crypto? In terms of actual losses, I don't think so.
There's always going to be fraud in every single industry. There's nothing you can really do about that.
But in terms of the dollar figures of fraud and the percentage of transactions that are fraudulent, they're much bigger in the traditional financial system than they are in the crypto ecosystem.
In October 2013, JP Morgan paid $13 billion − the largest fine in corporate history − for fraudulently misleading investors over toxic mortgage deals. Toxic investments fell in value significantly causing the market to collapse. Between 2008−2016, it paid $1 billion to settle transactions for manipulating various metals futures markets.
Just recently, there was a ship seized in 2019 with 20 tons of cocaine worth $1.3 billion.
Who owned the ship? JP Morgan.
I'm not suggesting they were in the business of selling cocaine, but what I'm saying is that they help facilitate illicit transactions. All banks do.
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