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Larry Fink, the head of the world’s largest money manager, said Tuesday he thinks the rise of digital currencies reflects how much money laundering is going on.
“Most importantly, when I think about most of the cryptocurrencies, it just identifies how much money laundering is being done in the world,” Fink, founder, chairman and CEO of BlackRock, said in a Bloomberg TV interview.
“It’s much more of a speculative platform for Asia and it’s heavily used for money laundering,” Fink said.
South Korean, Japanese and, until last month, Chinese investors, are major traders of the largest digital currencies by market cap, bitcoin and ethereum.
Tuesday breakdown of bitcoin trading volume by currency
Source: CryptoCompare
U.S. authorities have repeatedly shut down online marketplaces in the part of the internet known as the dark web, where illegal goods are sold and money laundering often occurs. Transactions on those websites often occur in bitcoin or other digital currencies in an attempt to preserve anonymity.
Just this summer, the U.S. Justice Department and Europol announced the closure of AlphaBay and Hansa, the two largest dark web marketplaces at the time. A grand jury in the U.S. District Court for the Northern District of California also charged Russian national Alexander Vinnik and the digital currency exchange he allegedly operated, BTC-e, with money laundering and related crimes.
Fink joins a number of major Wall Street executives who have spoken on digital currencies in the last several weeks.
JPMorgan Chase CEO Jamie Dimon called bitcoin a “fraud” and warned that if digital currencies grow too large, governments will close them down. On the other hand, Morgan Stanley CEO James Gorman said cryptocurrencies are “certainly something more than just a fad” and authorities may actually need to adapt to the growth of the digital currencies.
Goldman Sachs CEO Lloyd Blankfein put a message on Twitter Tuesday, “Still thinking about #Bitcoin. No conclusion – not endorsing/rejecting. Know that folks also were skeptical when paper money displaced gold.”
Tweet
On Monday, Goldman said it is exploring digital currencies services for clients.
BlackRock is the world’s largest money manager, according to Investment & Pensions Europe. The company had $5.7 trillion in assets at the end of the second quarter.
“I’m a big believer in the potential of what a cryptocurrency can do. You see huge opportunities in it,” Fink said. “But what we’re talking about today, it’s really much more [that] … people are speculating on it.”
Bitcoin briefly multiplied five times in price this year and traded near $4,300 Tuesday, up more than four times in value for the year. Ethereum traded near $300, up more than 3,000 percent for the year.
