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A detailed report on money laundering in the United States highlights that cash remains king for criminals looking to launder illicit funds. Crypto firm Bakkt has warned it is low on cash and could run out of money within the next year. Meanwhile, the U.S. wants a hearing on potential conflicts of interest in the criminal cases of Sam Bankman-Fried and Alex Mashinsky.
Crypto use in money laundering ‘far below’ cash — US Treasury
Cash, not cryptocurrencies, remains the go-to money laundering method for criminals and organizations, according to a detailed risk assessment report from the United States Treasury Department.
A primary takeaway is that criminals and transnational criminal organizations continue to use cash. The Treasury highlights the anonymity, stability and ubiquity of cash as a means of payment as a primary reason why it remains the preferred method of laundering illicit proceeds.
“Criminals use cash-based money laundering strategies in significant part because cash offers anonymity. They commonly use U.S. currency due to its wide acceptance and stability,” the report highlights.
Bakkt warns it may run out of cash in 12 months
Crypto financial technology firm Bakkt has warned that it’s running out of cash and might not have enough to keep it in business over the next 12 months.
Bakkt — launched in 2019 and backed by the Intercontinental Exchange (ICE), owner of the NYSE — said in a Feb. 7 filing with the U.S. Securities and Exchange Commission that it may “not be able to continue as a going concern.”
The firm was widely seen as introducing institutional investors to Bitcoin
BTC
$45,398 amid a deepening bear market and some on X questioned how it managed to run out of money amid a crypto market recovery.
Bakkt said it hasn’t been able to sustain an operating profit and sufficient cash flow. It added that Its future success will depend on its ability to raise capital. It is looking at a potential raise by issuing its registered securities in the public markets to “fund our long-term vision.”
Bakkt shares dropped 7.6% in after-hours trading on Feb. 7, falling to $1.34. It’s shares are down 37% year to date.
U.S. prosecutors call for SBF, Mashinsky hearings
United States prosecutors have flagged potential conflicts of interest in the criminal cases of former FTX CEO Sam Bankman-Fried and former Celsius CEO Alex Mashinsky.
In letters addressed to judges presiding over the cases, prosecutors raised concerns about attorneys Marc Mukasey and Torrey Young, who both filed appearance notices in the criminal cases against Bankman-Fried and Mashinsky.
“As the trial evidence in this matter established, Celsius lent money to Alameda Research, and certain loans were repaid by Alameda Research to Celsius using customer funds,” the letters said. “The relationship between Alameda Research and Celsius creates the potential for conflicts in several respects.”
Prosecutors said that Mashinsky had partially blamed FTX’s sister firm, Alameda Research, for the collapse of Celsius in 2022. However, they also acknowledged that the judges may waive the potential conflicts as they were “not so severe.”
