violations Archives -
When societies discuss cryptocurrencies, the argument that the decentralized and unregulated nature of the crypto space leaves the door open to abuse, like money laundering and financial fraud, is often put forward by officials and authorities. However, a string of cases involving precisely these sins, and many, many banks, show that regulations are largely ineffective in preventing this type of violations, especially when they are committed by the big traditional players.
Credit Suisse Investigated for Money Laundering in Corruption Cases
Affairs, probes, fines, resignations – over the past weeks, we’ve often seen these words in headlines, right next to some of the most recognizable names in the financial industry, including ING Group, Danske Bank, Citigroup and Deutsche Bank. The rush to apply the same ‘anti-what-not’ policies to the much better in this respect crypto sector, the same old practices that have failed time and again with the status quo banks, is beyond comprehension.
After the Netherlands, Denmark, the US, Russia and some former Soviet states like Estonia, it was time that Switzerland came into the spotlight. Local media have quoted the country’s financial watchdog stating that Zurich-based Credit Suisse has failed to meet its legal obligations to prevent money laundering. The Swiss bank has been implicated for misconduct in alleged corruption cases involving the international football governing body, FIFA, the oil companies of Brazil and Venezuela, Petrobras and PDVSA, as well as a business relationship with a “politically exposed person”, Swiss Info reported.
The Swiss Financial Market Supervisory Authority (FINMA) explained it had identified deficiencies in the bank’s anti-money laundering (AML) process and shortcomings in the applied control mechanisms and risk management. The regulator has taken measures to improve the bank’s AML procedures and intends to engage a third party to monitor the implementation of the measures and the steps already initiated by Credit Suisse. In connection to the cases, some of them dating back to 2014, FINMA has actually investigated several banks in the last three years.
According to a statement released by Credit Suisse, the agency has not imposed any fines, ordered any disgorgement of profits or limited its business activities. The bank also expressed gratitude for FINMA’s “acknowledgement of the improvements that have been made to our compliance and control framework over the last few years.”
Three Indian Banks to Pay Penalties for Failing to Report Fraud
Indian regulators, however, are not so benevolent when it comes to dealing with this kind of violations. The Reserve Bank of India (RBI) has recently imposed monetary penalties on three state-run banks which have failed to detect and report on time accounts associated with fraud. In early September, Indian media reported that the central bank has fined the Union Bank of India, Bank of India and Bank of Maharashtra 10 million rupee each (~$ 138,000). They have been accused of contravention of RBI’s instructions contained in a document titled Master Circular on Fraud – Classification and Reporting. According to the released separate statements, the penalties have been imposed under the provisions of the Indian Banking Regulation Act, taking into account the delay on the part of the banks to report fraud.
British Bank Fined for Moving Money on Behalf of Iranians
Cryptocurrencies are often criticized for offering organized crime syndicates, terrorist organizations and rogue states the opportunity to transfer funds internationally and circumvent sanctions imposed by First World governments and international financial organizations. But as it has been revealed recently, banks have been also tempted to facilitate the needs of such actors.
London-headquartered Standard Chartered is facing a new penalty for breaching sanctions against the Islamic Republic of Iran, Bloomberg reported in August. In 2012, the British bank paid a $ 667 million fine for allegedly moving billions of dollars through the United States on behalf of Iranian clients. This time, the US investigation into its Iranian dealings may lead to a criminal penalty, according to several unnamed sources familiar with the case.
The resolution is expected by the end of the year. A number of American government and regulatory agencies are involved in the probe, including the US Justice Department, New York’s Department of Financial Services and the Manhattan District Attorney. In a statement, Standard Chartered said it’s fully cooperating with the investigation.
What do you think about these cases of banks involved in money laundering and fraud schemes? Share your opinions in the comments section below.
Images courtesy of Shutterstock.
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Serena Williams was fined $ 17,000 for three code violations during Saturday’s U.S. Open final.
Twitter Inc. on Thursday said it permanently banned Alex Jones and his website Infowars, effectively taking away one of the last few online microphones available to the right-wing provocateur.
WSJ.com: US Business
Airline employee who stole plane from SeaTac Airport was ‘authorized’ to be near craft, officials say, citing ‘no security violations’August 12, 2018 | dailybusinessnews
The airport employee responsible for stealing a plane and jetting off on an “unauthorized flight” at Seattle-Tacoma International on Friday before crashing was able to “legitimately” access the area where the plane was held, said officials, adding that they think he was the only person aboard.
Japanese police have seized cryptocurrency belonging to a man with unpaid parking fines. The police explain that the revised fund settlement law enacted in April last year allows cryptocurrency to be seized like any other asset.
Crypto Seized for Parking Violations
The Hyogo Prefectural Police traffic guidance division announced this week that it had seized cryptocurrency owned by a 59-year-old resident with multiple delinquent parking violation charges, local media reported. Hyogo is a prefecture in the Kansai region of the country’s main island, Honshu. Kobe, located west of Osaka and Kyoto, is the capital of the prefecture.
The Kobe Shimbun reported that about 5,000 yen (~US$ 44) worth of cryptocurrency was seized but the police did not reveal which crypto. Nikkei, on the other hand, reported that “there were 2 kinds” of cryptocurrencies “such as bitcoin deposited with an exchange that were seized.” The news outlet elaborated:
According to the prefectural police traffic guidance division, it is the first time in the country to seize virtual currency in relation to parking violations.
However, the crypto seized from the man’s account at an exchange currently does not cover the total amount owed to the cops. According to the Kobe Shimbun, he has failed to pay a total of 99,700 yen (~$ 885) in violation charges including four parking tickets issued between January 2014 and July 2016.
The news outlet further detailed that if payment is not received by the end of this month, which is the deadline for claiming seized property, the cryptocurrency will be cashed out at the current rate and paid to the prefectural police.
Crypto is Asset that Can be Seized
The man’s parking violations are considered “unattended vehicle.” The Kyoto Prefectural Police explained that the term means “a vehicle that is illegally parked, with its driver away from the car, and which cannot be started immediately. This is regardless of the length of parking time, or whether the vehicle engine is turned on or off, or whether the emergency flashing lights on or off.”
Usually, “Land, houses, automobiles, bank savings, salary, and life insurance payouts could be seized, based on the decision of the Public Safety Commission,” the police clarified.
However, in the case of the 59-year-old, the Hyogo Prefectural Police “did not know his place of work and [he] had no cash deposits or savings,” the publication conveyed. Citing that the revised fund settlement act that legalizes cryptocurrency as a means of payment enables the police to seize crypto assets, the news outlet elaborated:
According to the prefectural police, after [crypto] asset value was recognized by the revised fund settlement law enforced in April last year, it [cryptocurrency] was judged as an asset that can be seized.
The Hyogo Prefectural Police have been increasingly active in collecting unpaid fines and have seized small items including an automatic mahjong table, golf bags, figurines, and brand name goods, the Kobe Shimbun described. The division says that they will not allow violators “to escape since it will be unfair for the people who are paying [the fines].”
Editor’s Note: Nathalie Stucky contributed to this article.
What do you think of the Japanese police seizing crypto for unpaid fines? Let us know in the comments section below.
Images courtesy of Shutterstock and the Hyogo Prefectural Police.
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A class action lawsuit has been filed against Ripple Labs, its CEO, and subsidiary. The plaintiff alleges that the defendants have violated the state and federal securities laws, engaging in schemes to raise hundreds of millions of dollars through the sale of unregistered ripple tokens (XRP).
Class Action Lawsuit
San Diego resident Ryan Coffey has filed a “securities class action” lawsuit against Ripple Labs Inc, its CEO Bradley Garlinghouse, its wholly owned subsidiary XRP II LLC, and ten related persons. Attorney James Taylor-Copeland representing Coffey filed the lawsuit with the Superior Court of the State of California, seeking damages on behalf of Coffey and all others similarly situated.
According to the court document dated May 3, Coffey purchased 650 XRP at $ 2.60 per token around January 6 and sold them at approximately $ 1.70 per token around January 18. Coffey described:
[The lawsuit] arises out of a scheme by defendants to raise hundreds of millions of dollars through the unregistered sale of XRP to retail investors in violation of the registration provisions of state and federal securities laws.
‘XRP Genesis and the Never-Ending ICO’
Coffey detailed in his filing, “unlike cryptocurrencies such as bitcoin and ethereum…all 100 billion of the XRP in existence were created out of thin air by Ripple Labs at its inception in 2013.”
Citing that 20 billion tokens were given to Ripple Labs’ founders and 80 billion to the company itself, he alleges that the defendants “earned massive profits by quietly selling off this XRP to the general public,” adding:
From 2013 to the present, [the] defendants have been engaged in an ongoing scheme to sell XRP to the general public in a never ending ICO…Defendants’ sales of XRP to the public accelerated rapidly in 2017 and early 2018.
He also claims that “these ICOs have become a magnet for unscrupulous practices and fraud.”
Coffey alleges that the “defendants market XRP to drive demand and increase [its] price,” including “blur[ring] differences between Ripple Labs’ Enterprise Solutions and XRP.” Other tactics include offering a bribe to Coinbase and Gemini exchanges to list XRP and promising R3, an enterprise software firm with a network of banks and financial institutions, a 5 billion XRP option, Coffey added.
At the time of this writing, XRP is trading at $ 0.91 on Bitfinex, a 73% drop from its high of $ 3.30 in January.
Violations of Securities Laws
Citing that the US Securities and Exchange Commission (SEC) has made it clear that digital tokens including XRP often constitute “securities and may not be lawfully sold without registration with the SEC or pursuant to an exemption from registration,” Coffey elaborated:
The XRP offered and sold by [the] defendants have all the traditional hallmarks of a security…However, [the] defendants did not register XRP with the SEC, and many of the representations [the] defendants made regarding XRP were designed to drive demand of XRP, allowing defendants to obtain greater returns on their XRP sales.
Last month, the SEC stated that both XRP and ether could be classified as securities. However, Ripple’s chief market strategist, Cory Johnson, told CNBC in early April:
We absolutely are not a security. We don’t meet the standards for what a security is based on the history of court law.
Do you think this securities class action lawsuit against Ripple has any legs? Let us know in the comments section below.
Images courtesy of Shutterstock, Trading View, and Ripple Labs.
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Twitter Inc. said Thursday it suspended 1.21 million accounts from its social media platform between August 2015 and the end of 2017 for “violations related to the promotion of terrorism.”
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They included 274,460 suspended accounts in the second…
A mural honoring the five Dallas police officers who were killed during a 2016 ambush attack was taken down Monday over city code violations, but a family member hopes the artwork can still be saved.