A French court has rejected UBS’ request to drop money laundering charges that could result in a 5 billion Euro ($5.8 billion) fine against the multinational bank. A conviction could also result in jail time for UBS executives. The court’s decision comes after UBS rejected a deal that would have reduced the bank’s potential liability to only 1.1 billion Euros.
UBS Accused of Helping Wealthy Clients Launder Money, Avoid Taxes
This case is the result of a seven-year investigation into allegations that UBS helped wealthy clients avoid over 10 billion Euros in French taxes. In addition to the $5.8 billion fine, the financial institution may also be liable for the missing tax revenue.
An anonymous whistleblower brought the case to the attention of French authorities in the hope that UBS, a world-renowned Swiss bank with operations in 50 countries, would finally be held responsible for its actions. Bitcoin.com quoted the whistleblower as saying, “If they set an example with UBS, most other banks will be scared.”
UBS settled similar cases in the U.S. and Germany to the tune of $780 million and 300 million Euros, respectively. This bank is not even the only international financial institution that is currently embroiled in a money laundering case. Estonia has accused Danske Bank, Citigroup, and Deutsche Bank of helping its former dictator embezzle $200 billion. Netherland’s largest bank, ING Group, was also recently fined $900 million for money laundering.
…But It’s Cryptocurrencies’ Fault
Despite money laundering cases against banks that are worth hundreds of millions or billions of dollars, the cryptocurrency world is often blamed for enabling financial crimes like money laundering, embezzlement, fraud, and blackmail. This may not be completely unwarranted considering that ICO scams have made off with millions of dollars and impersonators on Twitter have run enough fake “ETH giveaways” to annoy Elon Musk.
Major financial news outlets, banks, and the politicians in their hip pockets, seem quite eager to give cryptocurrencies more blame for financial crime than they deserve. This is likely an attempt to deflect attention from the banking industry’s role in enabling the exact same types of crime. The Wall Street Journal, for instance, recently accused ShapeShift of being complicit in the money laundering of $90 million.
Banks may also be making a show of attempting to dodge responsibility for cryptocurrency-related criminal activity by refusing to deal with crypto exchanges. A Chilean court had to order three of Chile’s banks to restore cryptocurrency exchanges’ bank accounts, for instance.
Prominent economists, such as Nouriel “Dr. Doom” Roubini, have been quite vocal in their doubt that crypto assets are useful to anybody but criminals. Roubini has even gone so far as to challenge Vitalik Buterin to a debate over the issue.
In light of cases similar to France’s current action against UBS, this amount of noise could be seen as an attempt to deflect attention away from the billions of dollars’ worth of money laundering, embezzlement, and tax evasion that are enabled by traditional institutions. UBS may have made an expensive mistake by rejecting the 1.1 billion dollar deal that was initially offered by French authorities.