Pandora Papers Leaks Expose Fiat Currency’s Soft Underbelly

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Crypto Regulation
Pandora Papers Leaks Expose Fiat Currency’s Soft Underbelly

It’s an expose whose aftershocks continue to reverberate globally. At 2.9 Terabytes of data, the Pandora Papers Leaks is the largest offshore leak to date. It reveals the financial secrets of the high and mighty in our societies. 

Focus on Fiat Currencies

Among those that the leak exposes are over 30 heads of state. Additionally, it shows the financial reports of 100 billionaires. Others are thousands of public figures in government and the private sector.

The Pandora Papers have drawn strong reactions globally. Kenyan President Uhuru Kenyatta, for instance, has promised a comprehensive statement on them. This follows mounting pressure from Kenyan tweeps. The leaks suggest that Mr. Kenyatta and his family have stashed over 3.5 Billion Kenyan shillings in offshore accounts.

The expose has brought into sharp focus the role of fiat currencies in money laundering. To date, many Governments have been reluctant to adopt crypto payments methods. Their main contention is that they’re conduits for proceeds from illegal activity.

Despite overwhelming evidence to the contrary, many governments insist that crypto aid in corruption. Again, they hold that cryptos enable money laundering, drug trade, and many illegal activities. US Treasury Secretary Janet Yellen is among influential personalities that think crypto aid crime. Since the transactions involved fiat currencies, the leaks have brought them under scrutiny.

Vindication For Crypto Supporters

The leaks come as a big win for crypto supporters. Reports indicate that only minimal volumes of crypto service illicit activity. Chainalysis’ 2021 report shows that in 2019, criminal activity accounted for 2.1% of total cryptocurrency transactions. That’s transfers worth approximately $21.4 billion. 

That figure dropped to 0.34% in 2020, that’s roughly $10.0 billion. Contrast that with the UNs estimate of $1.6 to $ 4 trillion lost annually to criminal activity. It’s easy to see that illegal activity in crypto compared to fiat is minimal. To Crypto lovers, the leaks are a vindication of their long-held position that they’re a transparent means of Payments.

Crypto Would’ve Ensured Transparency 

Additionally, crypto enthusiasts will point at the shadowy nature of international fiat transactions. Crypto would have mitigated this as validators capture all crypto transactions on the blockchain. And although the identities of the players remain private, their wallet addresses are public. Thus they eliminate loopholes for behind-the-scenes dealings. 

Further, the Pandora Papers reveal another advantage of crypto payments over fiat; peer verification. This feature is crucial to the sustenance of any BC project. Peers verify transactions before okaying them. High verification thresholds plus penalties incurred for wrongful proofs help thwart fraud.

Far-Reaching Implications 

The Pandora Papers leak follows similar ones before. In 2016 the Panama Papers leaked from the Mossack Fonseca law firm hit the headlines. The dossier contained 2.6 terabytes of data. The Paradise Papers leak soon followed. Most of the information concerned Appleby, an offshore provider. The cache had 1.4 terabytes of data. 

Pandora’s is telling not only in the size of data but the geographical extent. It touches individuals and entities across the globe. It’s important to note that it isn’t illegal to set up an offshore entity. Many do so for legitimate reasons. That said, their secrecy is attractive to those with criminal intentions.

Wayne Jones

Wayne is an all-rounded cryptocurrency writer who has written for several publications in the fintech industry. Having graduated from the University of Essex Colchester, he developed a passion for blockchain technology and has been curious about how the blockchain can modify the traditional financial industry.