Dispatch #3: What the FinCEN Files Mean for Crypto

4 min read

In this patch of your weekly Dispatch:

  • The FinCEN Files drop a bomb on traditional finance
  • Crypto is the best performing asset of 2020
  • The U.S. government says banks can provide services to stablecoin issuers

The Big Idea

What do the FinCEN Files Mean for Crypto?

Traditional finance was rocked this week with the release of the FinCEN Files. In 2019, BuzzFeed News received a leak of more than 2000 “suspicious activity reports (SARs).” These reports show how banks let the US Financial Crimes Enforcement Network know about suspected money laundering.

For more than a year, BuzzFeed and more than 100 news organizations from 88 countries around the world delved into over $2T (yes, trillion) in suspicious transactions and came to one resounding conclusion: banks do their absolute bare minimum when it comes to money laundering. By filing SARs, they effectively absolve themselves of future prosecution, meaning they go right on banking those nefarious actors and reaping the fees along the way.

For those in crypto thinking this damning look at traditional finance would somehow be to our nascent industry’s benefit, Andreas Antonopolous says “think again.”

Still, one bit of good news is that of the trillions in suspicious activity, the only real mention of crypto came in a report around $173M processed by BNY Mellon.

It feels like the full impact of these reports is yet to be seen. For now, we recommend checking out BuzzFeed News’ media coverage or the work of their partner, the International Consortium for Investigative Journalists (ICIJ).

The Latest In…


It has been a rough spell for DeFi. Last week, the total value locked did peak above $13B but that has subsequently come down. One bright spot is Uniswap’s token UNI, which has rebounded $120M. Also of note, Christie’s is hosting an auction that includes a non-fungible token as both digital representation and certificate of authenticity. Pretty rad.

The Latest In…


Polkadot continues to generate excitement as a layer-one alternative. This week, Parity upgraded the technology behind Polkadot with the release of Substrate 2.0 - an improved version of their blockchain building software. The startup behind decentralized computing platform Sia Tech also raised $3M in new funding and rebranded to Skynet Labs.

The Latest In…

Central Bank Digital Currencies

Boy oh boy was it a big week in this space. Some of the big hits:

The Latest In…


Stablecoins are one of the breakout crypto uses of 2020. The new guidance from the Office of the Comptroller of the Currency (led by a former Coinbase lawyer) is that US banks are officially allowed to service stablecoin issuers.

The Latest In…


Bitcoin hasn’t had three consecutive positive quarters since 2017. Can we break the trend? 2020, do not disappoint us!

The Week’s Most Interesting Data Story

Crypto is 2020’s Best Performing Asset

A new article in Bloomberg is stating the (to us, at least) obvious: crypto is the best-performing asset of the year - beating even gold despite that asset reaching record highs over the summer. The driving force? “A cryptocurrency mania known as decentralized finance.” While we’re not sure we agree with the characterization of “mania,” DeFi and its underlying ETH have been driving a huge amount of activity and excitement in the space. Check out how indexed crypto growth compares to some other assets.

Hot Topics

What the Community is Discussing This Week

As mentioned above, though people have been working on them for years, non-fungible tokens (NFTS) - aka digital collectibles - have picked up some major narrative energy in the last week.

Robinhood (which just closed another $660M in funding this week) has led a generation to become investors. Between this and crypto, is investing the profession du jour of a new cohort?

During a week where we’ve seen a lot of red, Sam from FTX gets a great conversation going around the projects people are genuinely excited about.

Our Take

@AntoniNexo This Week

  • “The risk is really being outside of it all rather than being in and losing”: our Co-founder and Managing Partner Antoni Trenchev talks crypto on Bloomberg Markets: European Open.
  • “We have got to start thinking in Bitcoin” is one of the takeaways from Antoni’s conversation with Charlie Shrem on the Untold Stories podcast. Listen to the full interview here.
  • In his Cointelegraph opinion piece, Antoni argues that financial literacy in the crypto space is key to bridging the gap between digital and traditional finance.
  • And, commenting on this week’s Big Idea, he told Decrypt: “The FinCen leaks deal a massive blow to mainstream finance’s ‘holier-than-thou’ stance as regulated, stringent, fair, responsible. They expose just how inept — in a best-case scenario, or unwilling — in the worst case, regulators and traditional banks are at fighting money-laundering and fraud. Fundamental, comprehensive reform is needed and digital finance must be part of this reform, for the obvious reason that it offers greater transparency. What’s happening instead is an attempt to vilify and discredit cryptocurrencies even further as a threat to the current financial system. This, however, is just a smokescreen to shift the focus away from the main point — that the current financial system is rotten at its core. Digital finance rightly threatens this corrupt system.”

What to Watch for Next Week:

  • Will cryptocurrencies remain the best performing assets of 2020?
  • Will NFTs continue to suck energy from DeFi or will we see a shift back?
  • Will stablecoins continue their mad growth?

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