The foundation for much of what we now know as anti-money laundering (AML) originated in 1970 with a piece of U.S. legislation that went largely ignored for a decade: the Bank Secrecy Act. This law requires financial institutions in the United States to assist government agencies in detecting and preventing money laundering by forcing them to report transactions of over $10,000 and maintain a paper trail of them. It took until the mid-1980s for banks to genuinely adopt the law, but in the following decades, and with subsequent codification of more AML practices, the U.S. became known as the global lodestar in the fight against financial injustice, thiefdoms, and criminality.
In its first few weeks, the Trump administration have sought to reverse 55 years of progress and launch the world’s largest economy onto a path of deregulatory delusion, opening the doors to kleptocracy, fraud, and the dissolution of consumer financial security.
Derived from Ancient Greek (“klepto” meaning theft and “cracy” rule), kleptocracy means “rule by thieves”—a definition that, before long, may become less of a cautionary term and more of a damning reflection of America’s trajectory.
Crypto’s first family
Though he denounced Bitcoin as a “scam” in 2021, Trump helped send crypto prices to an all-time-high last August thanks to his lofty plans to transform the U.S. into a “crypto capital.” Central to the new administration’s cozy relationship with digital currencies and their deep-pocketed custodians are:apro-crypto task force and executive order that scales back age-old regulatory oversight, and a wave of deregulation that has incentivized the proliferation of meme coins (and thus mainstreamed a prime money-laundering method).
Predictably, crypto fraud surged in the days following Trump’s inauguration. The question now is not whether deregulation has spurred this illicit activity—it’s how the so-called “anti-corruption capital of the world” can justify enabling an ecosystem where untraceable currencies flourish unchecked.
And what of Trump’s followers who blindly invested in his self-serving meme coin merchandising? $TRUMP is yet another meme coin rug pull, it appears.
Meanwhile, the administration is rapidly filling its ranks with crypto and corporate insiders who act with their interests at heart, and not those of the American people, according to NoCorporateCabinet.org.
Crypto firms, vying for influence, donated nearly half of the $274 million in corporate money during last year’s election according to nonprofit watchdog Public Citizen.
And look no further than Trump’s Avengers-style crypto crew tasked with assessing the feasibility of a strategic Bitcoin reserve. Riddled with conflicts of interest, the taskforce is led by Silicon Valley investor-turned-crypto czar David Sacks and anti-regulation lobbyist Paul Atkins, Trump’s nominee for SEC Chairman.
The executive order to “promote U.S. leadership in digital assets” has already seen enforcement orders likely reversed against prominent crypto firm Coinbase, as well as the removal of accounting regulation SAB 121 (which called for financial institutions acting as custodians of crypto to cite them as liabilities on their balance sheet), thus paving way for many Wall Street banks to soon hold crypto for the first time. Heavy hitters like Morgan Stanley are already courting crypto clients in anticipation of an IPO boom, and all this to further line the pockets of crypto bros.
But what of the average American who bears the brunt of the risks? Increased fraud cases, Ponzi schemes cloaked as investment opportunities, and the destabilization of traditional financial markets all disproportionately affect everyday citizens. Hedging bets on a currency so infantile, volatile, and easily exploitable is a recipe for disaster.
The world for sale
Just as the 1970 Bank Secrecy Act was a transformative piece of legislation, forging a new path for anti-money laundering practices worldwide, so too was the Foreign Corrupt Practices Act (passed seven years later). Foundational in pioneering fair and bribe-free foreign business practices, it ultimately meant that U.S. companies were prohibited from bribing foreign government officials for their own benefit.
Yet the Trump admin has decided stop enforcing the FCPA—and the subsequent companion mandates, the Foreign Agents Registration Act (FARA) and Foreign Extortion Prevention Act (FEPA), which made it illegal for foreign officials to demand bribes from U.S. businesses. Opposing corruption has purportedly become too onerous. Under the banner of ostensibly patriotic “competitiveness” the new administration has thrown away an order that’s nearly 50-years old: “FCPA enforcement…actively harms American economic competitiveness and, therefore, national security,” Trump declared in his executive order.
The removal of this bedrock of the U.S.’s counter-corruption arsenal is hardly surprising given Trump’s prior decrying of the legislation (he described the FCPA as “horrible” in a 2012 CNBC interview). It can only be hoped that the continued existence of the legislation underpinning the FCPA, FARA, and FEPA (the administration has “halted the enforcement” rather than entirely repealed them) will lead to a reversal of these motions by future admins.
Equally, one would hope those countries that moved in unison with the U.S.’s prior anti-corruption initiatives would continue to enforce—and hopefully strengthen—their legislative regimes, such as the U.K. with its stringent and effective 2010 Bribery Act.
In totality however, these regressive moves have meant that Washington has reneged on its promise for fair and transparent business, instead favoring those with padded wallets.
Opening America’s doors to kleptocrats
Few could deny that America’s former position at the forefront of international anti-corruption efforts was a net benefit to the world. Whether that be in its discovery and repatriation of billions worth of misappropriated funds and assets (one need look only to the Justice Department’s announcement last summer of an additional $156 million returned to the people of Malaysia, previously embezzled and laundered by 1Malaysia Development Berhad) or its influence in catalyzing a bribery-free global marketplace ambition through multilateral agreements.
Thus, the disbandment of the agencies responsible for this repatriation of illicit funds—the Kleptocracy Asset Recovery Initiative and its Russia-focused subsidiary Task Force KleptoCapture, as well as the FBI’s Foreign Influence Task Force—can only really be seen as a repudiation of decades of anti-kleptocrat Western-led development and a rejection of America’s “global police officer” role in the fight against transnational corruption and white-collar crime. Worse still, they have been enacted by newly-appointed attorney general Pam Bondi, who herself is no stranger to lobbying on behalf of wealthy individuals and foreign governments.
Ceding this former position of authority and signaling an apathy toward combatting oligarchical money laundering through the dismantling of these programs may well hinder ongoing prosecutions and limit the capacity to prevent future crimes of consequential scale.
As has been indicated by the CEO of Transparency International: “It will most likely create new risk analysis complications, advance the competitiveness of foreign actors and increase the threat of harm to local populations in countries around the world.”
Consumer financial protection under siege
For every $1 the Consumer Financial Protection Bureau spent, $4 was returned to American consumers, according to the Congressional Progressive Caucus (CPC).
Borne out of an acknowledgment of the failures of financial institutions in 2008, the CFBP has long fought for consumers against the predatory behavior perpetrated by bad faith actors, in pursuit of a more transparent and equitable financial system.
It has removed medical debt from consumer credit reports, allowing an estimated 22.8 million people to see at least one medical bill removed from their files. It has capped overdraft fees at large banks to $5. It has slashed the typical credit card late fee from $32 to $8.
While dealing with these endemic, ongoing frustrations, the bureau was also famously agile: When the paradigm shifted with the emergence of regulatory-avoidant fintech firms, the CFPB was first to the scene—protecting Americans against lax safeguards and widespread corner-cutting. Having long punched well above its weight, the bureau has returned more than $21 billion to Americans since its inception, in spite of the continual efforts of corporate executives and lobbyists to tarnish its name.
That’s 14 years of genuine, valiant consumer safeguarding—but it took just a few weeks to destroy it.
Now under the jurisdiction of Russell Vought, the Trump-appointed Office of Management and Budget director, the CFPB has been forced to cease operations and shutter its Washington headquarters. (Vought has since restored some mortgage-related procedures, having acknowledged that the maintenance of the multitrillion-dollar market is of moderate importance.)
This comes at a time when the U.S.—and much of the West—is dealing with a fraud crisis. Money lost to fraud in the U.S. has tripled since 2020, with a reported $2.5 billion lost via a network of intricate scams. Central to this has been the rise of social media scams, with $442 million lost to them during the third quarter of last year. Who will help the American people now?
Tech titans looking to extend their dealings into financial services no longer have to contend with the CFPB. Elon Musk has long shared his desire to turn X into an “everything app,” containing social media, financial services, and retail. It’s hard to ignore the fact that Musk’s (amongst others’) political ascendence coincides with a remarkable scaling back of consumer protection measures. The U.S. government appears to be placing the demands of a minute collection of Silicon Valley tech heads above the needs of its own people. The result: a sort of rapidly forming kleptocratic oligarchy, with consumer concerns left by the wayside.
A new vanguard
America’s sad departure from its position as anti-corruption king will have seismic effects on governments, businesses, and consumers worldwide. Financial security as we know it is under threat, with law enforcement already struggling to hold back the surge in global fraud cases and widespread financial crime—but we must continue to fight.
If history shows us anything, it’s that where there is a vacuum of leadership, others will fill it. In fact, of late, the U.K. and Nordics have ruled in America’s absence.
Once a global hub for dirty money trafficking, the U.K. has slowly established itself as an anti-corruption champion over the past 15 years. Successive governments have worked tirelessly to bring transparency to offshore U.K.-owned property, allocate adequate funding to law enforcement agencies, and indict the worst excesses of evasive overseas territories. U.K. enforcement laws, including the 2010 Bribery Act and 2023 Economic Crime and Corporate Transparency Act, directly pick up where recently decommissioned U.S. measures have left off.
Meanwhile, Nordic nations continue to lead in areas of AML enforcement, imposing landmark fines on Danske Bank, Nordea Bank, and Swedish fintech Klarna. In fact, following the 2008 financial crash, Iceland decided to go after the bankers themselves, jailing several senior executives and putting former prime minister Geir Haarde on trial. The nation’s three largest banks failed and were subsequently taken over by the Financial Supervisory Authority, and put in Resolution Committees.
The firm approach to enforcement has ensured the Nordics remain undesirable for money launderers and has put the onus on the big banks to regulate their past AML failures, with Danske Bank investing in intelligence-driven transaction monitoring systems to prevent future infractions.
Whilst America courts oligarchs and crypto bros, the U.K. and Nordics are proving that economic competitiveness and corporate integrity are not mutually exclusive. As Transparency International’s 2024 Corruption Perceptions Index places Denmark, Finland, and Sweden in the top three globally, the U.S. has fallen out of the top 20 for the first time in 25 years—indicative of its rapidly diminishing role as an anti-corruption authority, with its place likely to further tumble following regulatory backslide.
However, a glimmer of hope still exists for Americans. The Corporate Transparency Act, previously paused, has been reinstated by
This month, the U.S. District Court for the Eastern District of Texas stayed its nationwide preliminary injunction on beneficial ownership information (BOI) reporting under the Corporate Transparency Act (CTA). As a result, corporations and LLCs in the U.S. must now file their initial BOI reports to the Treasury Department’s Financial Crimes Enforcement Network starting next month. Aimed at combatting illicit activity including tax fraud, money laundering, and financing for terrorism, the act should be seen as a breaking in the clouds amidst the deregulatory storm underway in Washington.
The fight against kleptocracy is far from over. As Washington cedes its leadership, the U.K. and Nordics are stepping up, ensuring that global financial integrity remains more than just a fading American ideal.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
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