Stuart Alderoty, Ripple’s Chief Legal Officer, disputes the belief that cryptocurrencies play a major role in global money laundering. In a recent X post, he cited a Wall Street Journal report on Ali Ghulam, Iraq’s “dollar king,” arguing that the US dollar is the real issue.

US Dollar’s Role in Money Laundering

Alderoty pointed to a massive money laundering case involving Ghulam’s banks as evidence. According to WSJ, Ghulam’s banks recently transferred tens of millions of dollars to fictitious vendors in Iraq through fraudulent invoices. US officials suspect that Ghulam’s banks, among over two dozen Iraqi banks, have been involved in channeling funds to Iran and its affiliated militias.

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US auditors believe the banks used front companies and fake invoices to bypass sanctions blocking Iran’s access to the global financial system. However, they struggled to trace 80% of the over $250 million in daily wire transfers. Some funds may have gone to Iran’s Islamic Revolutionary Guard Corps (IRGC) and other Iranian-backed terrorist groups.

Cryptocurrency’s Role in Fighting Money Laundering

Alderoty’s views align with the perspective of many crypto advocates who argue that integrating cryptocurrencies into mainstream finance will not worsen money laundering problems. These advocates assert that most current money laundering issues involve fiat currencies, particularly the US dollar.

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Crypto proponents argue that cryptocurrencies are not fully anonymous and are indeed traceable. They believe blockchain technology, which underpins cryptocurrencies, offers a solution to global transaction challenges rather than exacerbating them. 

Unlike fiat systems, where records can be altered or physical cash goes untracked, blockchain transactions are traceable and permanent.