There’s a fine line … between crime and fine

UK Prime Minister Rishi Sunak posted an update on LinkedIn the other day, saying how brilliant Britain is for foreign investments. That’s kind of no surprise, coming from the office of the person who wants foreign investment, but I did take note of one paragraph specifically:

Despite challenging economic times, lots of sectors are flourishing. As was reported in City AM, London-based firms are still holding the fort in the Fintech sector, garnering $10.2bn worth of investment in 2022. Finance chief Janine Hirt for Innovate Finance highlights that “the UK is still receiving more investment in Fintech than all of the next 10 European countries combined, and remains second in the world only to the US.”

Yay! The UK is doing great and FinTech is doing the best!!!

This coincided with another headline saying that “London has emerged as the world’s leading crypto hub, new research has revealed England’s capital ranked highest in the world in the crypto-readiness index – devised by crypto tax software company Recap – closely followed by Dubai”.

Yay! Not only is London the best for FinTech and cryptocurrency, but we lead in all things related to the governmental regulation of finance.

And yet, alongside this, UK finance leads the world of money laundering:

The Economist said that the country has a money-laundering problem amounting to $125 billion per annum.

So when the UK government announced plans last week to crack down on dodgy dealings in crypto ...

A big theme that emerged in 2022 was the rise of risky loans made between multiple crypto firms and a lack of due diligence done on the counterparties involved in those transactions. The U.K. proposals would crack down on such activities, seeking to establish a “robust world-first regime strengthening rules around the lending of cryptoassets, whilst enhancing consumer protection and the operational resilience of firms,” according to a statement.

I wondered whether they really can.

I see all of this rah-rah cheering of how great London, the UK and Britain is for business and finance, and then sit on this fence between Britain having the best financial regulations versus the worst. I particularly took note of a Chatham House paper from late 2021 that makes the issue clear that, “despite much rhetoric and progress on paper, the UK remains a safe haven for dirty money, a great deal of which comes from Russia and Eurasia”.

This is why, when I see headlines like this …

Overseas organisations owning UK land must have publicly declared their true owners, under world leading UK laws to crack down on dirty money.

… or those relating to cryptocurrencies, and the possibility of their being used for corrupt processes and services, I kind of have my cynical eye out for what’s really happening. And what is really happening? What is really happening is creating a view that things are organised and structured and regulated, whilst allowing for the fact that much of it cannot be organised and structured and regulated.

But then, being practical, there’s a balance and a line. A balance between easy to do business with and a line between legal and illegal business. At the end of the day, most say the UK system of anti-money laundering and investment in innovation and progress works.

The UK is on the frontline of the fight against economic crime, according to a new report. The Financial Action Task Force (FATF), which sets the global standard in anti-money laundering and terrorist financing, has given the UK the top rating for its controls and measures, which include financial sanctions against terrorists. This is the highest rating out of the 60 countries assessed to date, meaning that the UK has one of the toughest regimes in the world.

Woo-hoo! We’re the best at stopping financial crimes, the best at investments and managing money, and the best for FinTech and cryptocurrency. But because of the fact that we’re the best at those things, we’re the #1 target for criminals, oligarchs, dictators and other politically exposed persons to wash their money through our systems.

Just a view …