A Fool Threw a Bitcoin Stone Into The Money Laundering Well
Does anyone even fact-check anymore?
Which one is the preferred way of laundering money: Bitcoin or USD?
Joe Kernen, longtime CNBC anchor and co-host of Squawk Box, has been very vocal about this issue lately. About a month ago, he cited a “study” on air that concluded that, since 2017, $20 trillion (with a T) worth of money has been laundered using USD vs. $33 billion for Bitcoin.
Where do the numbers come from? Well, there is this Tweet:
This seems to be the original poster, and he apparently writes a Substack called inbitcoinwetrust. The tweet cites the United Nations as the source for the USD figure and Global Investigations Review for Bitcoin. With a bit of Googling, it becomes clear that this is the Global Investigation Review source. The $33 billion figure comes from the Chainalysis report. One problem though: $33 billion seems to combine all cryptocurrencies, not just Bitcoin. You know the research is poor when one blatantly misses something that would further support the point being argued. That said, at least there is a reference to $33 billion.
The $20 trillion figure, the one that is supposedly the amount of USD laundered, doesn’t even clear that bar. Where does this number come from? The United Nations is cited but when we google “United Nations office drugs and crime money laundering since 2017 20 trillion,” it takes us to this page. There is a figure cited there, 800 billion to 2 trillion a year, but it is nowhere near $20 trillion over five years; even at the top of the range, it would fall well short. Further, that’s money globally laundered in any fiat translated to USD, and would presumably include Euro laundering, Yen laundering, etc., not just money laundered via USD.
In sum, the Bitcoin figure is likely overstated, the USD figure would also be overstated even if the correct reference was used, and most importantly, the reference, as far as we can tell, doesn’t even exist.
This was enough for the alarm bells to go off, but we didn’t want to give up that easily. Perhaps the newsletter itself would provide more details? Well, we did go to the website, and this post dated February 19 seems to be where this image resides. It does say:
In recent days, the United Nations has published an edifying figure concerning the USD, Bitcoin, and money laundering.
Well…we write a Substack, too. This is simply too vague. There is no date, no publication name, just a single link that takes us to an article titled: The Numbers Don’t Lie: The US Dollar Has Been Used 606 Times More Than Bitcoin to Launder Money Since 2017. Maybe we finally found the source? We clicked away…
We then ended up on a website called Best Bitcoin Books. It is not clear who operates this site. It features the Substack publication inbitcoinwetrust at the top of the page. If they are not operated by the same interests, there appears to be some sort of affiliation
Anyway. This article says:
After testing Bitcoin, thieves realized that the U.S. Dollar system was much more welcoming to their illegal activities. This is confirmed by data published by a United Nations agency specializing in this field.
Since 2017, this agency estimates that over $20,000 billion has been laundered via the US Dollar. At the same time, “only” $33 billion has been laundered via the Bitcoin system. This represents an enormous differential. The US dollar was therefore used 606 times more than Bitcoin over the period to launder money.
Here we have the reference to the $20 trillion again. The supposed source makes the same reference but still no link to this alleged data published by a United Nations agency. This would be front and center, don’t you think?
The above blurb is followed by the same Twitter image you see above, and then a final reminder to the reader in case they missed the UN reference:
I’m not making these figures up; they were published by the United Nations Office specializing in drugs and crime.
If somebody is saying “I’m not making this up,” chances are they are making it up. Anybody who is serious about their work would not mention the UN multiple times and not provide a link. Where is this published data?
The author concludes with:
So I’d like to ask a simple question to those who still find it hard to open their eyes to Bitcoin:
Do you still believe the lies of politicians who want you to believe that Bitcoin facilitates money laundering?
Send me some Sats to help me educating more people on Bitcoin.
Simply amazing. This person actually has the audacity to ask people for money to help him educate more people on Bitcoin after declining every chance to provide a source for his data.
This is delicious fodder for folks who already made up their minds about Bitcoin. One person used this tweet in a LinkedIn post, and admitted that “the image attached to the post is taken from twitter,” and he hasn’t “fact-checked the data at all.” Welcome to the 21st century where it’s totally ok to mindlessly copy an image from Twitter and form an opinion. Fact-checking is optional.
That the internet is full of unsubstantiated nonsense and mindless feedback loops is well-known. What is more surprising is that this stuff finds its way into CNBC. Does anyone even fact-check anymore? It is pretty clear that Joe Kernen or anybody on his team didn’t, Kernen said that he doesn’t “know the exact units.” (3:18 of this video). Certainly, if he did, he would have at least realized that even the $33 billion reference is to cryptocurrencies, and not just Bitcoin.
A fool may throw a stone into a well which a hundred wise men cannot get out. On the heels of a Twitter image that takes the curious reader trying to get to the source data round and round in a mindless internet carousel, a CNBC anchor now believes he has what he needs to defend Bitcoin. Defend, he did:
We increasingly find ourselves disagreeing with Joe Kernen lately. In our previous post, we discussed him posing the wrong question to SEC Chair Gary Gensler, asking him to choose whether Bitcoin is a beanie baby or what amounts to the 8th technological wonder of the world. This one seems worse, though. The CNBC viewer now effectively heard that the USD is used 606 times more than Bitcoin to launder money. Never mind the fact that fact-checking is optional for many folks, especially for those who need sats to “educate” people. Fact-checking cannot be optional for CNBC.
So, why is this happening? At best, Kernen doesn’t realize that he isn’t even comparing apples to apples. He is just another victim of the good old base rate fallacy, completely misunderstanding probabilities and making meaningless inferences. We’ll talk about that in more detail in our next post. Worse, he doesn’t care. Either way, this is not the responsible journalism we came to expect from CNBC.
