30.07.2021

World Banks Paid Nearly $ 13 Billion In Fines In 2020

The world’s largest financial institutions were fined more than $ 12.79 billion in 2020. The most common violations were related to money laundering and illegal financial flows.

Of all the violators, US banks have paid the largest fines: more than twelve fines totaling $ 9.38 billion have been levied on the country’s banks for various compliance flaws.

Despite the huge fines for violation of the rules of work and crimes, bank representatives continue to criticize Bitcoin. In particular, the day before, an analyst at Bank of America called the first cryptocurrency the largest bubble against the backdrop of its growth. The expert also noted that the current conditions in the world cannot be called suitable for investments, therefore, in general, in his opinion, it is better to stay away from cryptocurrencies.

At the same time, cryptocurrencies operate on the blockchain – that is, in fact, a transparent transaction base that is available to everyone. For example, here is the first Bitcoin transfer sent to developer Hal Finney exactly twelve years ago. Everyone can see the details of the transfer, the amount and time of sending funds along with the commission paid.

Since banks operate in a much more closed manner, the combination of their remarks about cryptocurrency and the fines paid for money laundering seems ridiculous.

In general, such criticism does not coincide with the opinion of many analysts and the results of what is happening in the coin industry. Recall that cryptocurrencies have shown excellent profitability in recent months, and the niche itself has become much stronger and more diverse. The situation is illustrated by the graph of the capitalization of the cryptocurrency industry, that is, the product of all coins in circulation at their rate. On the eve of the indicator for the first time overcame the mark of a trillion dollars, and then dipped.

Today the market capitalization of cryptocurrencies is $ 988 billion. Here is a graph of the indicator from the beginning of 2019.

Bank fraud

The next on the list of violators were Australian banks with $ 981 million in three fines. $ 919 million of that amount goes to the country’s second-largest bank, Westpac, which was found guilty of ignoring anti-money laundering procedures, Decrypt reported.

Banks in China were fined the most in Asia, followed by Iran. Chinese banks received more than $ 87 million in fines, while Iran’s Future Bank was charged $ 37 million by a court in Bahrain after three bank officials were found guilty of money laundering.

Of all the banks, the American Goldman Sachs – an old bank founded in 1869 and one of the most powerful financial institutions in the world – paid the largest fine in 2020 at $ 3.9 billion for anti-corruption violations. Goldman paid the US government an additional $ 2 billion on various charges in the same case, bringing the total to nearly $ 6 billion.

This news looks especially ironic against the backdrop of statements by many critics that Bitcoin is allegedly the “fuel” for the activities of cybercriminals. As you can see, banks are also a major breeding ground for financial fraud.

In addition, in May 2020, representatives of Goldman Sachs stated that Bitcoin is not an asset class. According to them, the reason for this, among other things, is the high volatility of BTC and its “inability to create cash flows.” Cryptocurrency advocates have found an answer to these accusations.

We believe that after such statistics, representatives of the banking sector no longer have the right to criticize cryptocurrencies that operate on transparent blockchains. Of course, bitcoins and other coins are used by scammers, but this does not make them bad by default. In addition, bankers are regularly caught on money laundering and corruption, so there is not much to talk about here.

I would like to believe that the situation with banks will change, and they themselves will follow the example of Morgan Stanley. This company has invested in MicroStrategy, which is investing hundreds of millions of dollars in bitcoins. That is, in this case, the bank is trying to make money on the growth of the cryptocurrency, and not criticize it.

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