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| March 23, 2019

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There’s a Reason Urologists Are Busy This Time of Year

March 22, 2019 |

Pity the urologist who loves college basketball—he may not get much time to enjoy March Madness. Urologists around the country report an uptick in vasectomies this time of year—because men can recover by sitting on the couch and watching basketball. Stories in the Columbus Dispatch of Ohio, the…
Newser

Student Wins Free Year of Qdoba, Donates It

March 21, 2019 |

What to do when you win a year’s worth of free Qdoba, but you don’t eat Mexican food? In the case of one Kansas State University freshman, you use it to feed people in need. Cameron Koger tweeted after winning the “Qdoba Queso 3-point contest” at a Kansas State basketball…
Newser

Buffett Gives 390K a Shot at $1M a Year for Life

March 20, 2019 |

Warren Buffett is offering $ 1 million a year for life in his March Madness bracket challenge—but this year, only Berkshire Hathaway’s 390,000 employees are eligible. Employees will need to correctly guess which NCAA Division I teams make the Sweet 16—”assuming nobody else wins at the same time…
Newser

How the World’s Leading Banks Help Launder $2 Trillion a Year

March 11, 2019 |

The World's Leading Banks Help Launder $  2 Trillion a Year

Some of the most well known banks in the world are also the biggest money launderers. The recent Troika Laundromat affair added another $ 8 billion to the trillions financial institutions wash every year. Over $ 2 trillion is laundered annually by criminals who utilize various ways to hide money in banks, which are often complicit or at least willing to turn a blind eye. The following is a look at money laundering schemes used by criminal enterprises that use the world’s so-called ‘regulated’ banks as their main laundromat system.

Also read: Cointext Adds the Ability to Pay Bitpay Invoices Using SMS

The World’s ‘Regulated’ Banks Wash More Than $ 2 Trillion Every Year

Financial incumbents and politicians love to invade normal people’s everyday activities and they’d love to know how our funds are being spent right down to the last penny. At the same time, the banking system that they regulate is used to wash trillions each and every year using schemes like shell companies, bogus supply chain invoices, smurfing, and ‘mirror’ trades to hide funds that stem from illegal acts. In the last decade, few notable bankers or financiers have been jailed for financial crimes and money laundering save for Bernie Madoff. Many believe Madoff was only incarcerated because he stole from the banking cartel and shed light on their shady activities.

How the World's Leading Banks Help Launder $  2 Trillion a Year

Washing Money Using Banks

Since the last financial crisis, dozens of the world’s financial institutions have been caught laundering money and slapped with petty fines. Just recently the Troika Laundromat scandal revealed that banks like Citigroup, Deutsche Bank, and Raiffeisen helped criminals wash $ 8.8 billion in a seven-year period. Illicit funds are moved and obfuscated from the public eye using the traditional banking system in a variety of ingenious ways.

Mirror Trading

Mirror trading is a financial strategy that is legal in certain jurisdictions. The mirroring method allows two identical trades to be executed, but the selected strategy of the two combined trades cancels each other out. However, funds are still moved from one location to the next using the scheme. As one Quora commenter explains:

A client opens up a trading account with Deutsche Bank in Moscow. The client deposits let’s say the equivalent of $ 10,000 in rubles in his account and asks the bank to buy that amount of blue chip shares on the Moscow stock exchange. The client has previously instructed the bank that the same shares are sold on the London stock exchange for GBP; both trades are executed within fractions of a second of each other. Voila. Clean as a whistle.

Back in 2017, Deutsche Bank paid more than $ 670 million in penalties for participating in mirror trades that stemmed from illegal activities in Russia. Money laundering scandals have proliferated at Deutsche Bank and the institution has paid more than $ 9 billion in fines since 2008. Many other well-known financial institutions have been caught assisting mirror trading offenses like Bank of America, J.P. Morgan, and Danske Bank Estonia.

How the World's Leading Banks Help Launder $  2 Trillion a Year

Smurfing

Another popular move by banks is a method of laundering money known as ‘structuring’ or ‘smurfing.’ This involves conducting a large number of small transactions through a regulated bank, usually in a specific pattern to avoid triggering anti-money laundering alarms. Lots of banks located around the world have been caught smurfing or allowing customers to smurf. For instance, in 2017 the Commonwealth Bank Australia was accused of 53,700 structuring related instances by Australia’s financial watchdogs. In 2015 the Supreme Court in Vancouver charged the Canadian Imperial Bank of Commerce for assisting such transactions and there are countless other financial institutions that are simply dubbed “smurf banks.”

How the World's Leading Banks Help Launder $  2 Trillion a Year

Shell Companies

When people want to move shady money, lots of times they set up a fake business in order to hide the illegal proceeds. On some occasions, there are businesses that actually have operations like selling goods and services to obfuscate the illicit funds. But often, individuals set up ‘shell’ companies, which are basically incorporated or limited liability firms only on paper with no real operation inside them.

How the World's Leading Banks Help Launder $  2 Trillion a Year

According to the group of journalists who unveiled the Troika Laundromat scandal, roughly 75 shell firms were created to help facilitate the process. In the spring of 2017, it was also revealed that about 21 shell companies were involved in a money-laundering scheme that took place between 2010 and 2014 that involved washing $ 21 billion in illicit funds. That particular escapade involved the use of the world’s top 50 banks including Credit Suisse, Deutsche Bank, Citibank, HSBC, Bank of China, and Royal Bank of Scotland.

Legitimate and Illegal Business Mixing

Just like the shell company example above, many banks have assisted people in mixing ‘dirty money’ with legitimate business practices. There are all types of sanctioned businesses people use to mix illegal funds with an authorized entity and one of the biggest schemes uses real estate. Many well-known financial incumbents have been caught red-handed assisting with the mixing of real estate sales and illegal proceeds.

How the World's Leading Banks Help Launder $  2 Trillion a Year

Selling properties and the real estate market, in general, is less scrutinized and in 2018 Denmark’s largest bank was accused of mixing clean and dirty money through the sale of properties. Another way criminals and politicians use banks to launder money is through the use of casinos and legal gambling. Back in 2014, the Department of Justice’s (DoJ) “Operation Choke Point” subpoenaed 50 banks in a casino money laundering ring in Las Vegas. The DoJ explained that banks like Wells Fargo, J.P. Morgan Chase & Co, and Bank of America were among the financial institutions involved.

While the Banks Wash Trillions and Get Slapped With Paltry Fines, Law Enforcement Focus on Petty Cash and Bitcoin Sales

Financial regulators and law enforcement agencies around the world seem obsessed with busting normal people for moving small amounts of funds. Police and three-letter agencies dedicate a lot of energy toward ordinary citizens who move bitcoin or petty cash, but allow bankers to wash trillions without jail. Last year Rustem Kazazi, a U.S. citizen, had his life savings stolen ($ 58,100) from law enforcement and the TSA and Border Patrol at Cleveland Hopkins International Airport never charged him with a crime. In May 2017, entrepreneur Sal Mansy of Detroit, Michigan was charged by the DoJ and the District of Maine for selling bitcoins in an unlicensed manner. In fact, many Localbitcoins sellers have been prosecuted in the U.S. for being an illegal money transmitter and hit with money laundering charges.

How the World's Leading Banks Help Launder $  2 Trillion a Year

Unfortunately, the world’s bureaucracy continues to focus on banning cash and claiming cryptocurrency’s main form of use is money laundering. In reality, the central banks’ fiat money with currencies like the U.S. dollar and Japanese yen are the main vehicles for hiding shady funds. The status quo’s banking institutions are the main facilitators of these crimes and the magnitude of money they hide eclipses the entire cryptocurrency market cap by a long shot.

What do you think about the methods used to launder money through the world’s mega financial institutions? Let us know your thoughts on this subject in the comments section below.


Image credits: Shutterstock, Wiki Commons, Pixabay, Citynews, and Bloomberg.


Need to calculate your bitcoin holdings? Check our tools section.

The post How the World’s Leading Banks Help Launder $ 2 Trillion a Year appeared first on Bitcoin News.

Bitcoin News

U.S. federal deficit has ballooned 77% so far this fiscal year

March 5, 2019 |

The federal budget deficit ballooned rapidly in the first four months of the fiscal year amid falling tax revenue and higher spending, the Treasury Department said Tuesday, posing a new challenge for the White House and Congress as they prepare for a number of budget battles.

The deficit grew 77%…


L.A. Times – Business

CNN

Iraq defeated ISIS more than a year ago. The group’s revival is already underway

March 5, 2019 |

There is a different feel to the atmosphere in Baghdad these days, as if the chokehold that has gripped the Iraqi capital for the better part of the last decade and a half has started to ease.
CNN.com – RSS Channel – World

Lyft files for IPO: It touts its growth and reveals it lost $991 million last year

March 1, 2019 |

Potential investors in Lyft Inc.’s initial public offering got their first look at the ride-hailing company’s financials Friday, revealing a start-up that’s hustling to outrun its growing losses.

Lyft’s revenue is exploding, but so is its net loss. Like many other IPO candidates, the San Francisco…


L.A. Times – Business

Putin’s Order: Russia to Adopt Cryptocurrency Regulation by July This Year

February 28, 2019 |

Putin’s Order: Russia to Adopt Cryptocurrency Regulation by July This Year

Russia’s President Vladimir Putin has instructed his country’s government to adopt federal laws relating to cryptocurrency by July this year. Russia has earlier broadened the definition of “digital financial assets” to include cryptocurrencies. Putin’s latest order resembles one he made regarding crypto regulation last year.

Also read: SEC Chair Explains Key Upgrades Needed for Bitcoin ETF Approval

Putin’s New Order

Putin has approved a list of instructions for 47 orders, according to a document posted on the Kremlin website on Wednesday. Among them is an order for the government to work with the State Duma, the lower house of parliament, to ensure adoption of “federal laws aimed at the development of the digital economy.” They include “determining the procedure for conducting civil law transactions in electronic form, as well as regulating digital financial assets and attracting financial resources using digital technologies,” the order details.

Putin's Order: Russia to Adopt Cryptocurrency Regulation by July This Year

The deadline listed on the order is July 1, 2019. Responsible officials are Russian Prime Minister Dmitry Anatolyevich Medvedev and State Duma Chairman Vyacheslav Viktorovich Volodin.

As news.Bitcoin.com previously reported, the original texts of the proposed regulation for cryptocurrencies have been extensively revised. While references to cryptocurrency, tokens, mining, and smart contracts in the bills have been removed, the legal definition of “digital financial assets” has been broadened to cover cryptocurrencies.

Multiple Delays

Putin’s latest order resembles one he made last year when he instructed the government to work with the central bank to “ensure that changes are made to the legislation of the Russian Federation” to determine the legal status of digital technologies including cryptocurrency, token, and smart contract. He put Medvedev and the central bank governor, Elvira Nabiullina, in charge of completing the task.

Putin's Order: Russia to Adopt Cryptocurrency Regulation by July This Year

In May last year, three bills aimed at regulating cryptocurrencies were filed in the State Duma and were scheduled for adoption in July, as ordered by Putin. However, Russian lawmakers could not agree on the appropriate legal framework after the first reading in the spring.

The State Duma plans to review the bills again in March, Rambler news outlet reported last week, noting that Oleg Nikolayev, a member of the State Duma Committee on Economic Policy, confirmed that the discussion is at the final stage of development.

Medvedev said in January that there is no reason to bury cryptocurrencies. “As with any social phenomenon, any economic institute, there are both bright sides and dark sides,” he described. Earlier this month, the Russian Minister of Justice voiced his belief that cryptocurrencies do not need to be legally defined yet.

What do you think of Putin’s order? Do you think Russia will start regulating the crypto industry by July this year? Let us know in the comments section below.


Images courtesy of Shutterstock.


Need to calculate your bitcoin holdings? Check our tools section.

The post Putin’s Order: Russia to Adopt Cryptocurrency Regulation by July This Year appeared first on Bitcoin News.

Bitcoin News

China Starts the Year With a Corporate Bond Boom

February 21, 2019 |

Companies have rushed to sell new bonds in China this year, as Beijing loosens financial conditions to shore up businesses in a weakening economy.
WSJ.com: What’s News Asia

Guess What Amazon Paid in Taxes Last Year

February 18, 2019 |

Amazon, pay federal taxes? Hope Uncle Sam isn’t holding his breath. The retailing giant paid zero dollars to the feds in 2017 and 2018 despite profits totaling nearly $ 17 billion, the Guardian reports. Seems Amazon relied on tax credits and tax breaks for executive stock options to turn its 21%…
Newser