For a few years, major financial institutions have been blaming Bitcoin for laundering money through online drug dealing. However, those same institutions couldn’t be more hypocritical with the trillions of money laundering they have committed.
Banks accuse Bitcoin for being used in a part of the internet known as the dark web. The most notably known website taken down from the FBI was ‘the silk road’. The silk road was a dark web market place for drugs, counterfeit money, and weapons.
Though Bitcoin has been used for illicit activities, big banks have made it part of their business model.
.According to a study done by the International Money Fund (IMF,) banks launder $2.1 trillion each year. That is more than two thousand times the amount of money that Bitcoin has been accused of laundering.
Which banks are responsible for $2.1 trillion of laundering?
On June 17, law enforcement discovered 20 tons of cocaine aboard a vessel owned by JP Morgan Chase in a Philadelphia port. It is estimated that the amount of cocaine had a street value of over $1 billion. That one seizure alone is more than what Bitcoin has been accused of laundering.
Between 2004-2007, Wells Fargo processed $373 billion through wire transfers from Mexican Cartels. In 2012, the notorious Los Zetas held accounts with Bank of America which laundered proceeds from cocaine trafficking. Around the same year, HSBC had a unmonitored amount of $670 billion in transfers from Mexico and $9.4 billion in purchases. Deutsche Bank, which is the largest German bank, has wired $200 billion of shady transactions to its Estonian branch. This enabled Russian citizens to conduct mirror trading through Deutsche Bank’s Moscow office.
Rabobank allowed hundreds of millions in cash from Mexico to be deposited in its branches in California–which was then transferred elsewhere for extra cleaning.
Commerzbank processed over $250 billion in transactions from Iranian and Sudanese organizations between 2002-2008. Citigroup processed about $8.8 billion in transactions through Banamex from 2007-2012. There are more banks to list and chances are you have heard of these big names and have bank accounts with them.
So what are the consequences that banks endure for laundering all this money? Not much.
They repeat the same process over and over of paying fines that take care of court settlements to avoid further prosecution. Therefore, there are no prison sentences carried through and the circus continues.
JP Morgan Chase was only fined $50 million for the 20-ton cocaine debacle. Wells Fargo was fined $160 million for processing $373 billion. HSBC was fined $1.9 billion for the $670 billion dollar transfers. Deutsche Bank was fined $670 million for wiring $200 billion through the Estonia branch. Rabobank was fined $369 million for allowing hundreds of millions in deposits from Mexico. Commerzbank was fined $1.45 billion for processing over $250 billion. Citigroup was fined $237 million dollars for $8.8 billion in transactions to Banamex.
These “fines” end up being a line item in “the cost of doing business” on the bank’s budget. Not much different than the cartels’ estimated losses drawn up in their profit projections of anticipated drug seizures at the border.
They add up to pennies on the dollar considering how much these banks profit from illicit money transactions.
According to the United Nations Office on Drugs and Crime between 2 and 5 percent of total GDP is made up of money laundering.