EU Cracks Down on Cryptocurrency But Fails to Regulate Traditional Banks

EU Cracks Down on Cryptocurrency But Fails to Regulate Traditional Banks

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European authorities have been steadfast towards regulating bitcoin because they believe digital currencies bolster money laundering and criminal financing. However, according to reports, a multitude of the UK’s leading banks have processed funds associated with money laundering operations and criminal organizations.

Also read: Digital Currency Regulation Heats Up In The EU As Parliament Proposes Additional Rules 

While EU Officials Focus on Digital Currency Money Laundering, Many European Banks Launder Billions From Criminals

EU Cracks Down on Cryptocurrency But Fails to Regulate Traditional BanksThe European Financial Commission and Parliament have been ramping up efforts to de-anonymize payment avenues such as cryptocurrencies and prepaid cards since February of 2016. Over the past year, EU government agencies have drafted and submitted proposals that target “unpermissioned” blockchains that utilize digital currency tumblers in order to combat money laundering.   

The EU’s regulatory agencies seem rather hypocritical towards a very small decentralized cryptocurrency economy when European and U.S. financial giants have laundered billions of dollars over the past decade. Just recently the news publication The Guardian has uncovered ties between Russian money laundering and a variety of well known UK-based financial institutions. Banks include seventeen European financial incumbents such as Barclays, Lloyds, Coutts, the Royal Bank of Scotland, and HSBC.

HSBC processed $545.3m in laundromat cash, mostly routed through its Hong Kong branch,” explains The Guardian. “The troubled Royal Bank of Scotland – which is 71% owned by the UK government – handled $113.1m. Coutts – used by the Queen and owned by RBS – accepted $32.8m worth of payments via its office in Zurich, Switzerland. Coutts is winding down its Swiss operation and was last month fined by regulators for money laundering in a different case.

EU Officials Draft Regulations for Digital Currencies With Considerable Exaggeration, While Traditional Financiers Have Been Laundering Billions Over the Past Decade  

This week EU legislators submitted a draft report that has added a few new cryptocurrency amendments to the official AMLD regulatory guidelines. Amendment proposals suggest there is quite a bit of concern when it comes to anonymity, specifically with public blockchains such as Bitcoin. However, recently one financial researcher suggests governments worldwide greatly exaggerate concerns in regards to the association between criminal financing and money laundering with cryptocurrencies.

“Treating cryptocurrencies as an exceptional threat creates the misleading impression that more conventional financial products are not already equally, or more, vulnerable to terrorist exploitation,” explains the Royal United Services Institute consultant David Carlisle.

EU Cracks Down on Cryptocurrency But Fails to Regulate Traditional Banks
HSBC money laundering and criminal financing estimates add up to £5.57 billion over the past decade.

Traditional financial services like the current banking system are widely used for laundering and criminal financing according to many online resources. Estimates are in the billions in regards to these illegal activities, and a majority of funds stem from European and U.S. banks. For instance, the British multinational bank HSBC has been accused of laundering £5.57 billion over the years and had to pay a penalty of £1.2 billion in a deferred prosecution agreement with U.S. authorities.    

Furthermore, the Luxembourg-based Bank of Credit and Commerce International (BCCI) is estimated to have laundered £17.6 billion. According to reports, BCCI is widely considered as a bank that has helped facilitate drug cartels, gun smugglers, and small terrorist groups.

Banks Say They Follow Strict AML Procedures But Cannot Deny Money Laundering Data

With the latest findings of European banks funneling large amounts of Russian funds, it shows EU regulatory agencies are apparently missing the fact that traditional banks far eclipse illicit financing within the bitcoin economy. According to The Guardian, news reporters reached out to all seventeen European banks who implied they strictly follow anti-money laundering guidelines, but not one bank could deny the data provided by the publication.

What do you think about EU officials clamoring about bitcoin anonymity while European financial incumbents launder billions? Let us know what you think in the comments below.


Images via Shutterstock, PMI, and Pixabay. 


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  • Martin C

    banksters launder hundreds of billions and don’t want competition from bitcoin cuz they can’t control it at all. Bitcoin is a mortal threat to the banksters of govt sachs et al. It is a war between the peoples money verses controlled super laundered bankster controlled money. Let’s see which one wins.Bitcoin climbs even as banksters outlaw and demonise.

  • milmacrs

    Banks don’t necessarily make money with bitcoin transactions and when they do, it’s just a fraction of what pours in with laundering. Governments and banks are long date partners in riping off ordinary people. They are going crazy with bitcoin and other crypto

  • Sylvere Kwizera

    I bet if you ask these politicians most of them don’t even know anything about the blockchain and bitcoins a how it works. They just labelled it a tool for criminals to justify their crackdown but in the long run the blockchain and the people will be the winners once the majority of people start to understand the advantages of the blockchain and crypto-currencies. We now know who these politicians work for and protect this is not such a big surprise. Opensource vs Secrecy.

    • Angelo Jamaica

      The less the Obsolete Politicians or criminals know about crypto the more I like it.
      The transformation is on the way and there is not a darn thing they can do to stop it or regulate it.

  • Gary Sachs

    What proof is there that bitcoin is being used for money laundering? If it is being used for money laundering, is the amount of any real significance?

  • Joe E.

    Why is money laundering even a crime?

    • Angelo Jamaica

      Because they do not get their cut of the laundering, the currency disappeared before it entered their rinse cycle.