On January 2, a man who stole 120,000 Bitcoin from Bitfinex — worth over $10 billion at today’s prices — posted on X that he had been released from federal prison after serving roughly 14 months of a five-year sentence. He thanked President Trump.
A few months earlier, in October, the founder of Binance — the world’s largest cryptocurrency exchange, which pleaded guilty to enabling money laundering and processing transactions linked to Hamas, al-Qaeda, and ISIS — received a full presidential pardon. In March, the three co-founders of BitMEX, who pleaded guilty to Bank Secrecy Act violations after prosecutors described their exchange as a money laundering platform, were also pardoned. On the same day, Trevor Milton — convicted of securities fraud for lying to investors about Nikola’s hydrogen truck technology — had his conviction erased as well. And on the President’s very first day in office, Silk Road founder Ross Ulbricht walked free after serving 11 years of a double life sentence.
These pardons are the most visible elements of a much broader shift. But they are not the whole picture.
A year of rolling back the guardrails
In February, President Trump signed an executive order pausing enforcement of the Foreign Corrupt Practices Act — the primary U.S. law prohibiting bribery of foreign officials — for 180 days while the DOJ reviewed its approach. The pause was eventually lifted in June under revised guidelines that narrowed the FCPA’s scope, prioritising cases involving cartels and national security while explicitly deprioritising corporate enforcement. The DOJ subsequently closed nearly half of its open FCPA investigations.
The Glencore monitorship — imposed after the commodities trader pleaded guilty to a decade of bribery across seven countries — was terminated early. OFAC delisted Tornado Cash from the sanctions list. The SEC dismissed or suspended enforcement actions against Binance, Coinbase, Kraken, Ripple, and Consensys. The Consumer Financial Protection Bureau, already weakened during the first Trump term, was further gutted.
Taken individually, each of these decisions has a plausible rationale. Taken together, they represent the most significant rollback of financial crime enforcement in the United States in at least two decades.
The business case for deregulation
I want to be clear about something: I do not think this is primarily about corruption, and I am not interested in writing a political article. The administration has been transparent about its philosophy. It believes that aggressive financial crime enforcement — particularly in the cryptocurrency sector — has stifled innovation, driven business offshore, and imposed compliance costs that make American companies less competitive. The pardons, the enforcement pauses, and the regulatory pullbacks are all consistent with a worldview that treats financial regulation as a drag on economic growth.
This is not a fringe position. Many serious people in business and finance share some version of it. The FCPA has been criticised for decades by corporate lawyers who argue it disadvantages American companies competing against rivals in countries where bribery enforcement is lax. The SEC’s crypto enforcement campaign under the Biden administration was genuinely aggressive and, in some cases, arguably over-broad. Compliance costs are real and disproportionately burden smaller firms. The argument that less enforcement equals more growth is intuitively appealing, especially to anyone who has sat through a BSA examination or an FCPA investigation.
I understand the argument. I have spent enough of my career on the corporate side — at firms like PwC, KPMG, Accenture, and IBM — to know that compliance is expensive, that regulatory burden is real, and that enforcement uncertainty creates genuine business friction.
But I have also spent enough of my career on the other side — leading financial crime investigations, building AML programmes, and tracing the proceeds of fraud, money laundering, and terrorist financing — to know that the argument is dangerously incomplete.
Why financial crime controls exist
Financial crime controls do not exist because regulators enjoy paperwork. They exist because, without them, the financial system becomes a tool for the worst actors in the world.
This is not theoretical. It is the hard-won lesson of three decades of increasingly globalised finance. Every major financial crime enforcement framework — the Bank Secrecy Act, the FATF recommendations, the EU’s Anti-Money Laundering Directives, the Wolfsberg principles — was created in response to a specific failure. The BSA was enacted because organised crime was using cash-intensive businesses to launder drug money. The FATF was created because the G7 recognised that money laundering was enabling narcotics trafficking at an industrial scale. Post-9/11 counter-terrorist financing measures were created because the attacks were partly funded through the formal financial system. The FCPA was enacted because American companies were routinely bribing foreign officials, distorting markets, and undermining the rule of law in developing economies.
Each of these frameworks was a response to real harm — not bureaucratic overreach, but documented, catastrophic consequences of uncontrolled financial flows.
The fundamental purpose of anti-money laundering controls is simple: to make it harder for criminals to use the proceeds of crime. Money laundering is not a victimless, technical offence. It is the mechanism that converts criminal activity into economic power. Drug trafficking, human trafficking, ransomware attacks, terrorist operations, sanctions evasion, tax fraud — none of these are economically viable at scale without the ability to launder the proceeds. When you weaken AML controls, you do not just reduce compliance costs. You reduce the operational friction for every crime that depends on moving money.
What happens when the U.S. leads the retreat
The United States is not just one country in the global financial crime enforcement architecture. It is the country. The dollar clearing system, the SWIFT network, the correspondent banking infrastructure — these are all built around U.S. regulatory requirements. When the U.S. sets a standard, the world follows. When the U.S. weakens a standard, the world notices.
I have worked on compliance programmes across Asia, Europe, and the Middle East, and I can say from direct experience that the single most common justification for investing in AML and sanctions compliance at non-U.S. institutions is the risk of U.S. enforcement. Banks in Singapore, Dubai, Frankfurt, and London build compliance programmes to U.S. standards not because their local regulators demand it, but because they need access to the U.S. dollar clearing system, and losing that access is an existential risk.
When the U.S. pardons the CEO of the world’s largest crypto exchange — a man who pleaded guilty to enabling terrorist financing — the message received in compliance departments around the world is not subtle. When the U.S. pauses FCPA enforcement and closes half its investigations, every multinational operating in a high-corruption jurisdiction recalibrates its risk assessment. When convicted money launderers are released after 14 months, the cost-benefit analysis of financial crime shifts.
This is not speculation. It is how institutional behaviour works. Compliance investment is driven by enforcement risk. Reduce the risk, and you reduce the investment.
Countries that have been building their own financial crime enforcement capabilities — and there has been genuine progress in the EU, the UK, Singapore, and Australia in recent years — now face a difficult question: why should they maintain expensive enforcement programmes if the United States, the architect of the modern compliance framework, is dismantling its own?
The long-term consequences
The effects of weakened financial crime enforcement do not appear immediately. They compound over years and emerge in forms that are difficult to attribute to any single policy decision. But the pattern is well-documented.
When AML controls are weak, illicit money flows increase. When illicit money flows increase, it distorts legitimate markets — inflating real estate prices, corrupting procurement processes, undermining fair competition. Kleptocrats who can safely park stolen sovereign wealth in Western financial systems have less incentive to govern honestly. Ransomware operators who can reliably convert crypto ransom payments to fiat currency have more incentive to attack hospitals and schools. Drug trafficking organisations that can launder proceeds through compliant-looking financial channels can expand operations.
These are not hypothetical scenarios. They are exactly what happened in the 2000s, when weak AML enforcement at institutions like Wachovia, HSBC, and Danske Bank’s Estonian branch allowed hundreds of billions in illicit flows to pass through the Western banking system. The consequences included a sovereign default in Mozambique, drug-fuelled violence across Latin America, and a Russian money laundering infrastructure that was later repurposed for sanctions evasion after the invasion of Ukraine.
The financial crime enforcement framework built between 2012 and 2024 — the period that produced the HSBC DPA, the Danske Bank prosecution, the Binance settlement, and the TD Bank guilty plea — was an imperfect, expensive, and sometimes over-broad attempt to address those failures. It had real costs. It also had real benefits: banks invested billions in compliance technology, criminal networks found it harder to access the formal financial system, and the deterrent effect of enforcement kept the vast majority of financial institutions within the bounds of the law.
That deterrent effect is now being systematically undermined.
The pardons are the most corrosive element
I want to say something specific about the pardons, because I think they are qualitatively different from regulatory adjustments or enforcement pauses.
Regulatory policy changes are reversible. A future administration can tighten FCPA enforcement, expand SEC crypto oversight, or strengthen the CFPB. These are policy choices, and reasonable people can disagree about where the dial should be set.
Pardons are different. A pardon tells every current and future participant in the financial system that the ultimate consequence of financial crime — imprisonment — can be erased. Not reduced on appeal, not commuted for cooperation, but fully and unconditionally erased by executive fiat.
The individuals who have been pardoned did not merely make compliance mistakes. Changpeng Zhao admitted to enabling transactions linked to terrorist organisations. The BitMEX founders operated what prosecutors called a money laundering platform. Ross Ulbricht ran a marketplace that facilitated the sale of narcotics, including drugs that contributed to overdose deaths. These are not regulatory infractions. They are serious crimes with real victims.
When these convictions are erased, the signal to the next generation of crypto founders, exchange operators, and financial intermediaries is clear: if you are large enough, connected enough, and willing to wait, the consequences can be made to disappear.
I have spent a career investigating financial crime, and I have seen firsthand how deterrence works — and how it fails. Deterrence does not require catching every offender. It requires that the consequences, when they come, are credible and durable. The pardons undermine that credibility in a way that no regulatory adjustment can match.
Where this leaves us
I am not arguing for a return to regulatory maximalism. I have seen enough poorly designed compliance programmes and enough over-broad enforcement actions to know that the system as it existed in 2024 was far from perfect. There is legitimate room for debate about the scope of the FCPA, the application of securities law to crypto tokens, and the appropriate intensity of BSA enforcement for different categories of financial institution.
But there is a difference between calibrating enforcement and abandoning it. There is a difference between streamlining compliance and pardoning the people it was designed to catch. There is a difference between making regulation more efficient and sending the message that financial crime is, ultimately, not that serious.
The United States spent decades building an enforcement architecture that, for all its flaws, made the global financial system meaningfully harder for criminals, terrorists, and kleptocrats to exploit. That architecture is being dismantled — not by a single dramatic act, but by a steady accumulation of pardons, pauses, dismissals, and rollbacks that collectively tell the world: the era of consequences is over.
As someone who has dedicated a significant part of his career to fighting financial crime, I believe that assessment is wrong. The consequences of financial crime do not disappear when we stop enforcing the law. They simply shift — from the criminals to their victims. And the victims, as always, are the people with the least power to protect themselves: the citizens of kleptocratic states, the patients of ransomware-hit hospitals, the communities devastated by drug trafficking, and the ordinary savers and investors who trusted that the financial system was governed by rules.
The rules still exist on paper. But rules without enforcement are just suggestions. And suggestions do not deter the kind of people I have spent my career investigating.