A lot is written about corruption, but fundamentally it’s about trust and how healthy societies can’t exist without it; and the World Cup has shown what happens when trust breaks down. The decision to allow U.S. striker Folarin Balogun to play in the World Cup match against Belgium was, according to FIFA, made by the relevant disciplinary committee in a routine manner. However, following the similarly generous treatment accorded to Portuguese megastar Cristiano Ronaldo before the tournament began, a lot of people not unreasonably questioned whether the rules were being set aside for commercial reasons.

It’s only football, so does this matter? In some ways, of course not. But I think the episode is instructive of how quickly trust can disappear. No one is under any illusions that FIFA is motivated purely by the desire to spread sweetness and light, thanks to corruption scandals, the grotesque “peace prize,” and all the other nonsense. But previously, what happened on the pitch was assumed to be sacrosanct, which is why these disciplinary decisions mattered more than it at first might appear.

Shortly after the U.S.-Belgium game, Argentina played Egypt, coming back from a two-goal deficit to achieve a remarkable 3-2 victory. I watched the game with my family, and it was notable how — instead of being amazed by Lionel Messi’s wizardry — all of us focussed instead on a refereeing discrepancy that led to a goal for Egypt being ruled out, and a seemingly identical one for Argentina being allowed. 

Previously we would have given the referee the benefit of the doubt: even if he’d made a mistake, we’d accept it was an honest one. But now we knew that the tournament had intervened to keep bankable stars playing for longer, in violation of its own precedents and regulations. Any decision that has that effect, as this one did, was immediately suspect. 

In the past, particularly when living in Russia, I used to hear a lot of Westerners being quite enthusiastic about corruption: it was nice they’d say, if they’d been stopped speeding, to be able to pay the police officer a bribe on the spot, and skip all the annoying paperwork. But that was a short-sighted way of looking at it: once a police officer, or anyone else in a position of power, gives anyone special treatment, then the trust that keeps all our interactions civilised, starts to break down. The more it is broken down, the harder it is to repair.

I am not particularly interested in football (Welsh rugby, on the other hand), which is a game I find both dull and mercenary. Besides, the Welsh team tends not to be very good. But I am interested in corruption, and I was surprised by how angry the Balogun affair made me. If you love a game, you need to hate its arbiters giving out special treatment, even if you are the beneficiary of it. That is a lesson quite a lot of politicians need to learn, both in the United States and elsewhere.

A report from the Anti-Corruption Data Collective makes particularly grim reading in this light. Lobbying by “high-risk foreign individuals” is higher under Donald Trump than it has previously been; the amounts being spent are often obscure; much of the lobbying is to overturn previous anti-corruption efforts; and, most worryingly, efforts are aimed not just at individual cases, but at the whole principle of fighting corruption.

“If these influence campaigns are successful, this sets a dangerous precedent where the standard for holding corruption accountable shifts according to whoever holds power in Washington. For those seeking to undo consequences of their corrupt acts, each time lobbying works, it confirms that there is a price at which these consequences can be undone,” the report notes. So just like football then.

Cometh the hour, cometh the bin

Sunlight, it is often said, is the best disinfectant. Though I don’t know if that’s literally true when it comes to bacteria, transparency is certainly a useful antidote to the kind of backroom deals that make corruption possible. Generally speaking, politicians honour this idea in principle, if not necessarily in practice, so it’s unusual for British far-right politician Nigel Farage to have launched an election campaign on the single issue that he personally should be allowed to keep his financial affairs secret.

All the other major parties have decided to sit this one out until the official inquiry into Farage’s finances is concluded, at which point there may well be another by-election anyway, leaving serial novelty candidate Count Binface to provide the main opposition. It’s odd to think that someone who obscures his face behind a giant rubbish bin and pretends to be a spacelord from the planet Sigma IX could be the voice of transparency, but it’s 2026, and that appears to be where we are. It would be genuinely hilarious if he won.

Of course, while we’re distracted by the attention-seeking behaviour of tiresome bores like Farage, actually important things are happening elsewhere. It’s definitely worth taking a look at this report into the Iranian drone industry, which illustrates how changes in the world economy have led to a weakening of American influence in particular, and Western influence in general.

This growth of a multi-node decentralised trade system is paralleled by the growth of the large and highly-efficient ‘Chinese Money Laundering Networks,’ which operate with the same scale and speed as any large financial institution, and now dominate illicit crypto activity. This is an interesting paper on how military strategists should think about money laundering, considering its significance in allowing adversaries to buy components for drones, and so on. 

We also need to remember, however, that by using money laundering legislation and sanctions profligately, we are lessening their effectiveness by teaching people how to evade them. Like antibiotics, we’ll miss them when they don’t work anymore.

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The United Kingdom has taken over the presidency of the Financial Action Task Force, the global standard-setter on tackling money laundering, and seems determined to keep calm and carry on despite the gigantic Donald Trump-sized hole being blasted in everything it’s trying to do.

The new president of the Financial Action Task Force is Giles Thomson, a career civil servant and archetypal safe pair of hands, who’s declared that the organisation’s priority for the next two years is fighting fraud. He estimated the global cost of fraud at $500 billion, which — if compared to the standard estimates of the volume of global money laundering as making up 2 to 5% of everything — means it contributes between a tenth and a quarter of all profits from financial crime.

Fraud is clearly thus a Very Big Deal, and therefore a well-chosen target for Thomson because everyone (including me) agrees that we need to hit it. However, I think I saw a hint of other perhaps more controversial tasks in the rest of his proposed priorities. The suggestion, for example, that the Financial Action Task Force (FATF) will conduct “proportionate assessments of lower capacity countries” looks to me like a recognition that it needs to stop criticising poorer countries that don’t actually launder money just because their legislation isn’t perfect.

This has been a weighty accusation in the past, not least because of the implicit suggestion of racism, made by, among others, regulator Charles Littrell, who summarised the FATF’s great flaw in 2022 thus: “the vast majority of dirty money and assets resides in, passes through, or is facilitated by the world's largest and richest countries. How then do the world's main [anti-money laundering] risk rankings invariably centre blame upon small, relatively poor, and nonwhite jurisdictions?”

This is not an academic question. Being blacklisted by the FATF is serious, and there has been definite unfairness in the past in which countries have ended up being singled out for a punishment beating. Hopefully a recognition of this reality is hidden somewhere inside Thomson’s rather gnomic utterance that “the FATF will support countries and the private sector to focus effort where the threat is greatest.”

Fortunately, the FATF will have an immediate opportunity to demonstrate that it shows neither fear nor favour when it comes to doing the right thing when it publishes the results of the ongoing evaluation of the United States. 

The U.S. was last evaluated in 2016, and the FATF made various recommendations, which Washington was supposed to have implemented within three years, and sort of did. With the passage of the Corporate Transparency Act in 2020, some progress was made, but since Donald Trump returned to the White House that has gone into screeching reverse.

Prosecuting foreign corrupt practices is “not a priority, ”transparency around residential ownership has been suspended, the Corporate Transparency Act  has been gutted, and crypto is everywhere. Above all, of course, the president himself has been making money at a rate that even Vladimir Putin would have to admire. His headline earnings figure —  $2.2 billion in the first year of his second term —  is clearly unprecedented, but so are the details. 

What for example will future historians make of the fact that the president declared his ownership of the trademark for “THINK BIG AND KICK ASS”? Ha, trick question, there won’t be any historians. They’ll have been replaced by AI.

Tether watch

Talking of history, I had slightly been hoping that the U.S. dollars in circulation might hit the appropriately round number of $2.5 trillion to mark the round 250th anniversary of the Declaration of Independence, but it was not to be. If only the Fed had launched the $250 bill in time, perhaps it would have got there, but we’ll just have to wait.

Meanwhile, there’s an interesting time ahead for Tether, this newsletter’s favourite cryptocurrency, which is sailing into choppy waters. It has decided to pull its USDT out of the European Union rather than to comply with the Markets in Crypto Assets regulations on stablecoins, which is a boost for its great rival Circle (USDC), which is very much available in Europe. 

The two big stablecoins have markedly different strategies: Tether is dismissive of regulators, while Circle cosies up to them. And now here comes a new rival in Open USD, which is backed by many of the world’s largest banks and tech firms, and which also promises to abide by everyone’s regulations. Is Tether at risk of becoming irrelevant?

Congo’s conflict coltan

Huge credit to the good folks at Global Witness for this report from the Democratic Republic of the Congo, where coltan smuggling is helping to perpetuate the grim conflict in the east of the country. It is the kind of methodical, thorough research that really helps open your eyes to how grim things can be, and how complicit the rest of us are in a global supply chain forged from conflict. 

Congolese people hack coltan out of the ground under the eyes of M23 guerrillas, who then smuggle it into Rwanda, where it is repackaged as Rwandan and given certification intended to show it’s not from a war zone. It is then shipped to refiners in China or Kazakhstan to be processed into tantalum, which is in turn sold to leading companies to be incorporated in the phones, tablets, jet engines, and other products that we all rely on for our lovely modern lives.

“Rwandan official figures show that coltan exports have increased more than 2.5 times between 2021 and 2025,” the report notes. “Coltan is an important revenue stream for Rwanda, which levies a 5% tax on exports. Since 2023, it has become the country’s second-largest export earner, after gold.”

And where does the gold come from? Also from the Congo, which is why the U.S. Treasury sanctioned a Rwandan gold refiner last month, following action taken by the European Union against the same company last year, but it has done little to rein in M23.

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I’ve been writing this newsletter since 2020, and in my first edition I marvelled at the concept of the centi-billionaire, and the fact there were at the time three people with 11 zeros in their net worth. What a six years it’s been. When I started writing this week’s edition, Elon Musk was a mere David Sun away from becoming the world’s first trillionaire, and now as I’m finishing it, Musk is worth the scarcely conceivable sum of $1.1 trillion. Nothing like this has ever happened before and there is no sign it is going to stop happening. There is no reason at all to suppose that in another half-decade I won’t be writing about how deci-trillionaires are the new thing.

This increasingly extreme inequality is a challenge for social cohesion, democracy and civilisation that we haven’t seen in modern times, second only to climate change as a threat to our future. Although in some ways, they’re the same challenge, considering the disproportionate share of emissions coming from rich people.

In some ways, if Musk’s wealth seemed to be making him happy it wouldn’t be so bad, but it appears only to make him angrier. I like to think that if I had a trillion dollars, I’d do something more constructive than stir up protests against ethnic minorities.

Reducing inequality is the right thing to do for every reason, not least because it would deprive very rich people of the ability to stoke pogroms anywhere they like. But how to do that? The only thing that has previously reduced inequality to any significant extent has been the 20th century’s series of global conflicts with massive destruction of life and property, and that’s the kind of thing it would be good to avoid.

I think there is a strong argument to be made, however, that the financial trickery abused by the very rich is also bad for national security, and it’s one nicely made here by Matthew McGlynn, who specialises in researching Russia. By degrading the ability of oligarchs to cheat their way to riches, we’d also limit the space of billionaires to dodge taxes and accountability.

It is notable that expert after expert speaking to the House of Representatives Committee on Financial Services about Chinese Money Laundering Networks pleaded for the Corporate Transparency Act to be properly implemented. “When a laundering network operates by scattering its footprint across hundreds of student accounts, dozens of shell companies, and multiple jurisdictions, traditional compliance frameworks may treat flags as isolated, minor incidents. The systemic risk is consistently underestimated, and responses remain heavily reactive,” noted Louis DeTitto.

If first we come for the money launderers, then the billionaires won’t speak out because they’re not money launderers. Also, it would mean we’d do a better job of tackling money laundering, which would be nice. 

While on the subject of congressional hearings, there are interesting moves by Senator Richard Blumenthal to probe how Iranian and Russian sanction-dodgers are using cryptocurrencies. In April, he wrote to Binance requesting further information, and now he’s written to Tether asking for information about misuse of its USDT stablecoin.

The details he’s requesting are far-reaching and potentially highly consequential, since they relate to connections with Iran and Russia, including A7, issuer of the leading ruble-denominated cryptocurrency. Perhaps most important, however, is his first question: “What legal jurisdictions does Tether believe it is subject to for USDT, in particular for anti-money laundering rules, reporting obligations, asset seizures, and sanctions compliance? Does Tether believe it is legally required to comply with Department of Treasury sanctions for USDT and issue suspicious activity reports (SARs) to the U.S. government?”

If the U.S. asserts regulatory authority over dollar-denominated cryptocurrencies as it has over all transactions in dollars then that would significantly undermine their attractiveness to illicit actors, and also do a lot to reassure people like me. Tether, meanwhile, has been bigging up its cooperation with law enforcement agencies, and says it’s frozen $450 million globally.

“For the past few years, stablecoins have come to dominate the landscape of illicit transactions, and now account for 84 percent of all illicit transaction volume,” concluded Chainalysis in 2026’s crypto crime report. It estimated total illicit transactions at $154 billion last year, so the stablecoin share of that was almost $130 billion. That is a fraction of the amount of money laundering estimated to move through either the trade system or indeed the formal financial network, but still a lot of money. It’s interesting to see, however, how Chainalysis still holds out hope for well-regulated cryptocurrencies helping to solve problems caused by standard finance.

“Stablecoins and on-chain settlement mechanisms in particular offer low-cost, borderless avenues for remittances, payments, and savings,” Chainalysis said. “If coupled with sound regulation and inclusive policy frameworks, these tools could help governments leverage crypto not just for resilience, but also for broader financial inclusion as part of economic recovery.”

Seeing will be believing.

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Donald Trump and the crypto world have done well out of each other. The Trump family has made profits of several billion dollars, and ‘cryptopreneurs’ have found the United States a newly supportive environment for their products. But the crypto world is not a single entity, and there are potential differences of opinion and approach between the parts that specialise in fraud, money laundering, and speculation (as well as the small number of societally beneficial uses), and a court case between billionaire Justin Sun and the Trump family’s World Liberty Financial threatens to blow those divides wide open.

He also had a key role in transforming Trump from cryptosceptic into cryptoenthusiast after investing millions of dollars in World Liberty Financial in late 2024, which helped to persuade the president — then running for re-election — that there was money to be made on the blockchain. 

Considering the improbability of the Trump family building an actually successful crypto company, and the strong likelihood World Liberty Financial would find a way to keep investors’ money as has happened with Trump ventures in the past, quite a lot of people assumed Sun’s money was in reality more of a gift than an investment. But it appears these doubters were wrong, at any rate that’s what it says in the suit that Sun has filed in California alleging that World Liberty Financial has abused his rights.

“Mr. Sun invested $45 million to purchase $WLFI tokens from World Liberty not only because of the project’s claims that it would promote adoption of decentralized finance… but also because of the Trump family’s association with the project,” his claim states. “But as Mr. Sun unfortunately has learned, World Liberty’s operators, including Chase Herro, see the project as a golden opportunity to leverage the Trump brand to profit through fraud.”

Sun has been careful to make clear this is not an attack on the president (“Unfortunately, certain individuals on the World Liberty project team have been operating the project in a manner that goes against President Trump’s values,” he posted on X), who is, he says, being betrayed by underlings — as autocrats have always been throughout history —  but he is certainly airing a lot of dirty laundry, which is likely to upset influential people.

Perhaps the most significant allegations, which World Liberty Financial denies, is that the Trump family’s company is on the verge of collapse, having paid most of its money to its owners, and that it tried to extort money from Sun to keep it in business. This is not just significant for its investors but also for America’s diplomatic ties, since Abu Dhabi has invested $2 billion via World Liberty Financial’s USD1 stablecoin, and the United States can ill-afford to further irritate its allies in the Gulf right now.

The timing of the lawsuit is interesting. It was notable that, shortly after Trump returned to the White House, the Securities and Exchange Commission paused its investigation into Sun. In March, that investigation was finally wrapped up, with Sun paying $10 million but not admitting wrong-doing, so he is perhaps no longer concerned about facing legal action himself.

Sun was also a major investor in Trump’s memecoin, but is not the only person who seems to have soured on that particularly unlovely project. One of the perks of being an investor in the token is the right to have dinner with Trump, but the value of that ticket dropped this year to just $539,000 from $3.28 million in 2025, with the Financial Times quoting an expert as calling the friendship between Trump and the crypto-world “a shotgun marriage,” which seems fair.

The Trump family has, however, made $320 million in fees from the memecoin alone, so I suspect they’re not that bothered.

A tale of two scammers

There was, hard though it is to imagine, a time when Trump was just a strangely-tinted TV personality with strong views on where Barack Obama was born. And back then, in those prelapsarian days, 2014’s billion-dollar Moldovan bank fraud was a big deal. It’s great to see that mega-oligarch Vlad Plahotniuc has been jailed for 19 years for his involvement in a crime that ruined his homeland.

Moldova has struggled through the resulting period of economic, financial, diplomatic and political turmoil, and it was great to see that Viktor Orbán’s defeat in Hungary has meant it can make progress on its movement towards membership of the European Union.

The other mastermind of the bank fraud is pro-Kremlin politician Ilan Shor who was convicted and sentenced in absentia. He remains, of course, at liberty. Though his A7A5 sanctions-evading cryptocurrency has still not recovered the trading volume it had before the recent hack of the Grinex trading platform where people bought and sold it. Grinex blamed the hack on Western intelligence agencies, but Chainalysis has an interesting alternative explanation, based on the fact that A7A5 is gradually being squeezed by Western sanctions (including the latest ones from the European Union).

“Faced with mounting international pressure and a shrinking operational footprint, actors associated with Grinex could be using the guise of an alleged hack to quietly siphon liquidity and execute an exit scam,” Chainalysis suggested. I’m not saying that is what happened and to be honest, I think it’s more likely that this was the handiwork of Ukrainian hackers or standard financial criminals. I mention it, however, because Shor does have a previous record when it comes to setting up a money laundering scheme and then defrauding everyone who was foolish enough to trust him with their money. 

The billion-dollar bank fraud was a clever way to profit out of the ‘Moldovan Laundromat,’ which had been allowing Russians to smuggle money out of their homeland before Shor and his co-conspirators destroyed the Moldovan banking system and stole everyone’s cash. It would be remarkable if he had basically done the same thing for a second time with his stablecoin. Crypto people call it a rug pull.

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Someone recently asked me what mark out of 10 I’d give for the efforts of governments to tackle financial crime. It got me thinking about that one bright spot of recent times — the West’s response to Russia’s full-scale invasion of Ukraine four years ago — and how it is now looking. Back in 2022, a lot of us were pleasantly surprised by the speed and ambition with which Western governments sanctioned the Russian government, state-owned companies and wealthy individuals. While Western pressure did not prevent the war, the asset freezes did impose a real cost on those conducting it. Four years on, however, those sanctions are beginning to look a bit shopsoiled. If they began at 7/10, they’re now scoring a lot lower.

There are reasons for this: Donald Trump does not appear particularly interested in Ukraine; the now former Hungarian prime minister Viktor Orbán has been snarling things up; and so on, as laid out in this analysis from Tom Keatinge. To make things worse, Trump’s latest adventure in Iran has pushed the oil prices sharply higher, earning more money for Russia while also giving Trump cover to lift sanctions, a temporary measure he has recently extended.

Keatinge argues that European countries need to be far more focussed on going after Russia’s payment mechanisms, particularly digital. “The extent to which crypto activity supports Russia’s war effort is clear,” he writes, “yet repeated initiatives to elevate the importance of opening a concerted line of effort on this issue are ignored. This must change.”

I agree, though it won’t be easy, considering the diffuse crypto ecosystem, and the increasing sophistication of Russian involvement in it. As long as Telegram is willing to host markets, the markets will continue to function to some extent whatever Western countries do (see the story of Xinbi, a Chinese-language hub for illicit crypto.) However, it does look like someone somewhere has lost patience with the ease with which Russia is funding itself.

“The sanctioned Russia-linked cryptoasset exchange Grinex announced an immediate suspension of its operations, citing a ‘large-scale cyberattack,’” reports Elliptic. According to the statement, which Kyrgyzstan-registered Grinex posted on Telegram, it lost around $13 million worth of USDT in the hack, blaming the theft on Western intelligence agencies.

“Today the attempts to destabilise our fatherland’s financial sector hit a new level, with the direct theft of the assets of Russian citizens and companies with the involvement of complex cyberattacks,” the statement said. Grinex is the successor to Garantex, which was shut down just over a year ago after years of effort by Western law enforcement. I would be surprised if Western countries had decided to take direct action against Grinex, as the exchange claims they did. Westerners tend to be a bit too legalistic for this kind of smash-and-grab, and I would expect any operation to more closely resemble what worked a year ago, conducted with Tether’s cooperation.

Instead, I suspect this attack is the work of hacktivists, perhaps working for or with the Ukrainians. Whatever the answer, it is embarrassing for the Russians, shows their crypto-security is not impregnable, and has made a noticeable dent in trading volumes of the A7A5 ruble-denominated stablecoin, which has become a key sanctions evasion tool. Three birds with one stone.

The important point is that sanctions were never supposed to be permanent: they are a foreign policy tool, not a law enforcement one. Hundreds of billions of Russian-owned dollars are languishing in various frozen bank accounts, and Western countries need to start thinking about what to do with them. They can confiscate them, investigate them or — if they’re feeling brave — use their potential return as leverage to persuade wealthy Russians to break with the Kremlin. What they shouldn’t do is leave them as they are to gather dust.

Hopefully, now that Orbán is out of the way, European countries will be able to take firmer collective action but they also need to be imaginative, and to start behaving as if they actually want Ukraine to win, rather than just not lose.

A defeat for transparency 

Of course, the United States will have a lot to say about that too, and what it ends up saying about how to tackle the Russian crypto operations will depend on what happens in the midterm elections this year. So, it strikes me as a big deal that crypto firms are once more pouring tens of millions of dollars into campaign vehicles in their quest for, what they euphemistically refer to as, “regulatory clarity.” Among them, of course, is Tether.

If you’re wondering quite how it’s possible to spend that much money on elections, I draw your attention once more to the great Integrity Index, with its records for who’s been spending what. It boggles my mind that, for example, the three Democratic rivals to the Republicans’ Susan Collins for the Maine Senate seat have raised more than $17 million just for the primary. Collins herself has raised over $10.5 million. There really shouldn’t be that much money in politics.

Besides, when it comes to value for money, investing in court cases beats investing in politics every day of the week. I don’t know how much the (ironically) anonymous plaintiffs in the 2022 case against corporate transparency in Luxembourg paid their lawyers, but its effects just seem to keep compounding to the benefit of those who want to hide their wealth from society. 

The European Union’s retreat from revealing the ownership of shell companies has given cover for Britain’s tax havens as they resisted efforts from London to force them to open up their own corporate registries. It looks like those efforts may have finally failed. “We are committed to full transparency, but I don’t think there will be any turning back,” said the British Virgin Islands’ Junior Minister for Financial Services Lorna Smith in comments confirming that the islands are in fact very much not committed to full transparency.

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Dutch friends like to tell me that their nation’s primary characteristic is bluntness, and the Netherlands’ Court of Audit has done nothing to challenge the stereotype with its bracing assessment of the country’s and, by extension, the world’s failure in fighting money laundering. Published last month, after an extensive analysis of the country’s efforts to stop dirty money, the Court’s report concludes that the system is expensive, discriminatory, and — possibly — completely ineffective. No one has really checked on that last point, so they can’t be sure, which if anything makes it all worse.

The Netherlands hosts the largest port in Europe, and is therefore home to a vast smuggling industry — Dutch politicians not infrequently warn that it’s becoming a narco-state — which requires an equally vast money laundering industry to service its profits. The Court of Audit set out to check the government’s response to this challenge, concluding that it cost banks €1.6 billion a year. It’s a price tag that has increased by almost 17% between 2021 and 2024, during which time the number of reports the banks’ 13,000 compliance officers made more than doubled.

“We think it is important that these employees make a meaningful societal contribution to preventing and combatting money laundering. There is no evidence that shows that they do,” the report witheringly observes.

The court sent surveys out to “politically-exposed people” (PEP is a jargon term meaning anyone in a position of power, or a close relative or associate) asking about their experiences. One person’s 83-year-old mother was asked to explain the source of an inheritance she received after the PEP applied for a loan. It is an eye-opening section, revealing how process is prioritised over any kind of judgement about where the risk of money laundering genuinely lies, but the real shock is in the section about different religious groups, which shows how the transactions of immigrant-focussed churches and mosques are systematically checked more thoroughly than local Protestant or Catholic congregations.

“A bank told a mosque that it was not possible to collect so much money after a prayer meeting,” the report notes. “The mosque’s trustees said the bank could come and see for itself but the bank declined. Feeling powerless and unable to deposit the money with the bank, the trustees hid it in the mosque.”

Imagine if we had an ongoing health crisis. And imagine that the government had created an expensive, intrusive system to tackle it, which was generating an endlessly increasing amount of paperwork, employing thousands of people and actively discriminating against religious and ethnic minorities. Surely, someone would at least put in the hours to check if the system worked, whether it was making people healthier, and assess therefore whether all these bad side effects were justified? 

With anti-money laundering policy, that is simply not happening. It’s based on faith rather than facts: we just need to do more of the same thing, and eventually we’ll get the results we want; if we don’t, we need to do the same thing even more. Interestingly, Texan judge Jeremy Kernodle — fresh from gutting the Corporate Transparency Act — has returned to the fight against anti-money laundering regulation. He has killed Geographic Targeting Orders, which were supposed to collect information around real estate transactions. “FinCEN’s explanations are vague, conclusory, and unpersuasive,” the court ruled. “The fact that some bad actors have conducted non-financed real estate transactions does not make such transactions categorically ‘suspicious.’”

I’m not saying I agree with Mr. Kernodle, because I don’t, but I don’t think pushback on anti-money laundering orthodoxy is necessarily a bad thing, since it obliges us to think more deeply about what actually works, rather than just going along with ineffective old policies. I hope people outside the Netherlands read the Court of Audit’s report and start wondering whether this approach isn’t long past time for a complete overhaul.

How do you solve a problem like crypto?

It’s quite unusual for there to be a divide in the UK’s anti-corruption community, which tends to agree on technocratic solutions to the problems around illicit finance, but one has emerged around the role of cryptocurrencies in political donations. Spotlight on Corruption doesn’t think the government’s moratorium on crypto donations goes far enough. There needs to be a ban, they argue, in primary legislation with additional safeguards. I agree.

The folks at RUSI, on the other hand, think a moratorium on crypto donations is a better idea since it would prime the country to take regulating cryptocurrencies more seriously, and prepare the way for them to be widespread. Take a look, judge for yourself, and let me know what you think. The difference may reflect deeper and unresolvable political differences in how countries should respond to globalisation, but it’s an interesting one to think about.

One thing I think we all agree on is the need for an urgent overhaul of all rules around electoral finance, while there’s still an honest system to approve them.

On that note, interesting news from Cambodia, which has extradited Li Xiong to China. Xiong, who is accused by governments worldwide of playing a key role in the now-collapsed Huione group, which was laundering money for crime syndicates on an industrial scale, with particular expertise in cryptocurrencies. Of course, the criminals have not stood still and have new markets up and running, but it is striking how quickly the extradition went ahead.

In contrast, the legal proceedings around the mammoth tax fraud exposed two decades ago by Sergei Magnitsky grind tortuously on, with the culprits still safe in Russia. They certainly enjoyed themselves in Europe for a while, however, as a court case in Paris shows. “The spending spree included: €668,517, ($771,703) at a Parisian art and antique gallery; €696,015 ($803,445) across two high-end French women’s fashion brands; €96,814 ($111,757) at a luxury jewellery store in Courchevel, an exclusive ski resort in the French Alps; and €127,182 ($146,813) for a Courchevel tour package.”

There are few things that reveal the moral bankruptcy of the regime in the Kremlin more than this case. It’s not enough that corrupt officials could kill a good man who exposed their $230 million theft from the Russian people, but the Russian state then shielded them while they splashed the loot on European luxury holidays, and continues to do so to this day. 

Nothing on the same scale is happening in the United States of course, but still this analysis of how enforcement of the Foreign Corrupt Practices Act is being politicised is a bit grim: “The transformation of U.S. antibribery tools into economic weapons also threatens to undo the global system the United States helped establish to punish business corruption.”

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It’s good to celebrate the wins, and I’m delighted the British government has decided to cap political donations from voters overseas at 100,000 pounds a year. It has long been grotesque that a wealthy citizen could move to a tax haven, stop paying towards the upkeep of his home country, and use the money he’d saved in taxes to buy influence in the politics of the country he’s left behind. I’m delighted that this has (largely) stopped.

This policy came from the independent Rycroft Review into foreign interference in UK politics, which other countries will be looking at closely as well. For believers in liberal democracy, which is on the retreat everywhere, this issue has only been getting more urgent thanks to Russian interference in Moldova, Romania and Hungary; as well as Chinese spying scandals; and the new U.S. strategy of supporting far right parties in Europe.

There’s a good summary of the Rycroft report here, but perhaps the most contentious recommendation is for a moratorium on any cryptocurrency donations to politicians until a time when the government feels regulations around digital assets are robust enough for them to be safe. Nigel Farage of the Reform Party popped up to say this was a retrograde step against innovation, but the real question is whether a moratorium is strong enough.

So much of the threat to democracy arises from the fact that wealthy people have been able to park their money wherever they like, to exploit multiple countries’ loopholes to evade taxes, scrutiny and investigations, and then use their money to project influence anywhere they wish. This is what doomed Russia’s chance of gaining democracy, and it’s now threatening many other places too. 

I would love to see the governments of the remaining few liberal democracies be far more proactive in advocating the benefits of their systems, rather than staying in the perpetual defensive crouch that they seem to be in at the moment. 

Money is global, but politics is local, so rich people can buy influence in ways that are not available to others, not just because they’re richer but because they can afford a whole world full of tricks to make their money go further. The answer to this problem is either to make politics more global, so it can stand up to the money, or to make money more local, so it is subject to countries’ political processes.

This is what the Rycroft review is doing with its cap on overseas donations, and it’s also why I think a complete ban on crypto donations would be better than just a moratorium. 

The health of democracy is far too important to be subject to the whims of the unaccountable, nomadic class of the mega-rich, and nothing exemplifies their influence so much as cryptocurrencies, which are privatised money. A ban would be harder for a future government to overturn than a moratorium. And it would also send a signal that liberal democracy has its own currency, which is that it abides by rules set democratically and doesn’t need or want to outsource any aspect of that to the billionaires who dominate crypto.

A moratorium on crypto suggests a time when crypto may become acceptable, and thus a time when we won’t want money to have democratic oversight, and will be comfortable with obeying the whims of its owners. Financial innovation can be good, but we don’t need to innovate in how we pay politicians, that is too risky a game to play. So play with crypto by all means, but if you want to play with democracy, you need to abide by its rules. And democracies need to be more confident about asserting that principle. 

Democracies also need to enforce their own laws properly, which means — as Rycroft suggests — hiring and training specialist police officers who can investigate attempts to slip dirty money into politics.

Crypto’s digital dodge

On that note, I’m glad it wasn’t me that had to write the new U.S. national money laundering risk assessment. Glad it wasn’t me who had to balance the obvious reality that cryptocurrencies are the most potent new tool for financial criminals since the invention of the shell company with the political fact that the White House really likes cryptocurrencies. “Uneven and often inadequate regulation and supervision across jurisdictions allows digital asset service providers and illicit actors to engage in regulatory arbitrage,” notes the report. But without pointing out that the United States itself is a major source of that particular problem.

Case in point, Tether, the El Salvador-headquartered company behind the dollar-pegged USDT stablecoin, has hired the Big Four accountancy firm KPMG to audit its books and confirm everything is as it should be. This is, the FT notes, all part of a plan to expand into the United States and to raise money there, though you would imagine that a first audit of a company with a murky regulatory history and claiming such a vast haul of assets could take a while. 

In other crypto news: the UK has sanctioned Xinbi, an illicit online marketplace in Southeast Asia, and #8 Park, a compound where criminals can keep up to 20,000 trafficked people to engage in global scam operations. Xinbi moved something like $20 billion between 2021 and 2025, much of it stolen from vulnerable victims, to the benefit of Chinese gangsters. The transactions tend to be arranged on the messaging app Telegram. Vladimir Putin has been restricting access to Telegram for a while now, to build a government-issued surveillance app. I don’t agree with Putin’s reasons for shutting Telegram down, but I do think that the world would be better off without it. And without Tether.

It’s hard to imagine that Tether will care about British sanctions nor that they will make much of a dent in these activities, but I think we need to keep an eye on how the situation evolves when other countries take an interest too. Xinbi has already launched its own payment app, and has expanded to use other messaging apps, including Telegram, suggesting it is working to make itself immune from regulatory actions.

This replicates what we saw with Russian crypto operators moving to the rouble-denominated A7A5 in response to the freezing of notorious crypto exchange Garantex’s assets last year. USDT is still central to how value moves globally, but the new tokens create a secure bridge in and out of it, which cannot be touched by Western regulators or governments.

A version of this story was published in this week’s Oligarchy newsletter. Sign up here.

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