Banks

Traditional Banks Continue to Excel at Money Laundering, Another Major Bank Ordered Closed

Traditional Banks Continue to Excel at Money Laundering, Another Major Bank Ordered Closed

A common misconception regarding cryptocurrencies is that they are ”only used by criminals”. Moreover, cryptocurrencies are often accused of being vehicles for money laundering.

Estonian bank ordered closed as money laundering investigation continues

Although any technology can be used for malicious purposes, money laundering is, in fact, a far greater problem for traditional banks using fiat currencies. Another example of this has just popped up, as Danske Bank has been ordered to close its operations in Estonia as a result of a new money laundering scandal.

The BBC reports that Danske Bank’s Tallinn branch has now been ordered to close up shop. This comes as the bank is under investigation in a number of countries, such as Denmark, Estonia, Britain and the US.

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This investigation comes following suspicious payments of around €200 billion in spurious payments from former Soviet states and Russia, as well as other countries. Moreover, a large part of these fraudulent funds has been funneled through Danske Bank’s Estonian branch.

Danske Bank’s interim chief executive, Jesper Nielsen, commented on the matter, saying that Danske Bank would comply and close banks in other nations as well.

”We acknowledge that the serious case of possible money-laundering in Estonia has had a negative impact on Estonian society and finds it best that Danske Bank discontinues its Estonian banking activities.”

Furthermore, Estonia’s financial regulatory body has already demanded that Danske Bank should close its banking branch in the country. Moreover, it is similarly requesting Danske Bank to do this and repay customer deposits within eight months.

Short the banks?

The head of Estonia’s financial regulator, Kilvar Kessler, commented on the matter, saying that ”[Estonia has] every right to put an end, once and for all, to this, as large-scale violations of the local rules have […] dealt a serious blow to the reputation of the Estonian financial market.”  

Moreover, it would seem Kessler is not the only one who is wary of the money laundering seemingly systemic to the banking sector. The well-known cryptocurrency industry profile Anthony Pompliano recently weighed in on the issue as well.

Specifically, Pompliano’s tweet hinted that this money laundering scheme further eroded the trust in the traditional banking system, before suggesting to ”Long Bitcoin, Short the Bankers!”.

In addition, all of this comes just weeks after Bloomberg reported that banks’ money laundering transactions amount to a staggering $2 trillion a year.

Image Source: “Flickr”

Ledger Nano S - The secure hardware wallet