Natwest fined for breaching anti-money laundering regulations after accusing crypto of the same thing

Natwest is just another bank that has been fined for failing to prevent fraud. A quick Google search would reveal many others that are repeatedly involved in far more serious criminality. Isn’t it time that banks were forced to clean up their act?

It seems that whenever leaders of large financial organisations are talking about crypto they bring up time and time again that in their view investors need to be protected from crypto money laundering and terrorist financing, and other accusations designed to besmirch the public perception of cryptocurrencies.

It’s perhaps debatable whether they are aware of the huge degree of transparency of most of the leading crypto projects, and conversely, of the opaqueness of some traditional banking practises.

Natwest has stood firm over past times as one of the big banks that has refused to countenance any dealings with cryptocurrencies. For example, it refused to serve business customers who accepted cryptocurrencies back in April of this year, stating that they were high risk.

Morten Friis, head of the Natwest Risk Committee, said that his bank:

“would have to conduct extra financial crime checks for any personal customers who wanted to dabble in cryptocurrencies, which have previously been linked to money laundering and black market dealings.”

An article on MSN.com detailed how Natwest completely failed to comply with anti-money laundering requirements, and as a consequence was fined more than £264 million.

Also, just to provide more background on just how serious this case is, it is the first time that a financial institution has been subject to criminal prosecution under anti-money laundering laws in the UK.

In fact, even when the National Crime Agency requested information about the customer in question, specifying that its money could be linked to the drugs trade, Natwest declined the request.

When banks receive a customer’s money, it is then lawfully theirs to do whatever they like with. Also, in the event of a crash, banks have the lawful right to bail in their customers and use their money to protect themselves. 

A Huffington Post article details how the banks will legally be able to pay each other first, in a “Cyprus style bail-in”, also meaning that they can confiscate customer funds in order to pay off their derivative bets first.

Banks are the gatekeepers of the incumbent financial system. They are probably justifiably worried about the growth of cryptocurrencies as this threatens their very existence.

However, to keep levying the same accusations at crypto while doing the very same thing themselves just isn’t excusable. Banks like Natwest could possibly keep themselves relevant if they start to allow crypto services to their customers. If they don’t want to do this then obsoletion beckons.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.