Earlier this month, Danske Bank, the biggest bank in Denmark, faced its largest scandal to date for laundering more than $230 billion. Despite the billions of dollars banks launder on a daily basis, critics are still focused on crypto exchanges.

On Sept. 28, Erik Voorhees, the CEO of popular cryptocurrency exchange ShapeShift, responded to the coverage of WSJ which compared the amount of money laundered by banks and crypto exchanges over the past two years. In the last 24 months, banks have laundered $2.7 billion every day while crypto exchanges have allegedly processed $9 million in illicit funds.

$2.7 billion times 730 days (two years) is equivalent to $1.97 trillion, or $1,971,000,000,000. Banks are said to have laundered $1.97 trillion in the past two years by laundering $2.7 billion on a daily basis.

In contrast, crypto exchanges have laundered $9 million in the entire period of two years, meanwhile banks laundered $1.97 trillion.

Is it an Issue of Money Laundering or Establishing a Narrative?

Based on the numbers alone, it is fairly evident that the problem lies in the institutions that are laundering $1.971 trillion in every two years rather than organizations that allegedly launder $9 million in 48 months.

Hence, if the concern of money laundering in the crypto market was really about the problem of funneling illicit funds, then the focus of government agencies and the media has to be established on banks.

Last week, it was revealed that the biggest commercial bank in Denmark laundered $230 billion in Estonia.

Danske Bank former Chief Executive Thomas Borgen, who resigned immediately after the scandal, said:

“It is clear that Danske Bank has failed to live up to its responsibility in the case of possible money laundering in Estonia. I deeply regret this.”

Karel Lannoo, the CEO of Center for European Policy Studies, a Brussels-based think tank, stated that the proportion of the scandal is so large that it may single-handedly harm the reputation of the country, which has been acknowledged as not of the cleanest in the world.

“This is a scandal of enormous proportions. We are talking about a country that has the reputation of being one of the cleanest in the world. And this is their largest bank.”

Yet, less than two weeks after the biggest scandal in the history of Denmark, the focus on money laundering has somehow shifted to crypto. A WSJ investigative report revealed that ShapeShift laundered a grand total of $9 million in the past two years, which has not been conclusively proven.

But, assuming that ShapeShift did process $9 million in illicit funds, it is nowhere close to the amount of money laundered by banks on a daily basis.

The WSJ reported:

“A parade of suspected criminals has taken advantage of ShapeShift’s services since the exchange began in 2014, according to law-enforcement officials, independent researchers and the Journal’s investigation.”

Crypto is Criminal Money

The narrative of critics against cryptocurrencies since the beginning was that it is the go-to form of money for criminals. However, as Europol recently disclosed, cash remains as the dominant money laundering tool amongst criminal groups, because of its anonymity.

Erik Voorhees


1/2 We are aware of the poorly-researched piece written against us by someone at WSJ. The implications are disingenuous and misleading. pic.twitter.com/IIyOjactGk

View image on Twitter

Erik Voorhees


2/2 Author cherry-picked data, excluding facts contrary to vilification narrative. $9m figure is less than 0.2% of our volume over the time-period. Meanwhile global money laundering through banks is 2-5%. Op-ed forthcoming.

Cryptocurrencies by nature, contrary to most reports, are not anonymous. Bitcoin wallets and transactions, for instance, can be tracked using a block explorer and even with mixing tools in place, startups like Chainalysis have developed sophisticated tools to untangle transactions.


This post credited to cryptoslate Image source: Unsplash

New Zealand’s police department has urged the public to be vigilant of online investment schemes offering heightened returns with investments in cryptocurrencies like bitcoin.

Police in the region of Canterbury in New Zealand issued a public alert on the department’s website on Wednesday, reminding residents to be wary of crypto-investment schemes after an incident wherein a victim lost NZD$320,000 (approx. $212,500) to an online scam.

While the police withheld specific details of the scam and its operators, “[t]he scam involved investments in cryptocurrencies, such as bitcoin,” the notice said. To solicit investments from its victims, the company offered lucrative returns in exchange for a small investment.

“The investment grew as more money was deposited, but soon began to decline,” police added. The spiral continued with the scammer contacting the victim on several occasions to obtain more investments that were deposited on the scheme’s website.

Reminding the public to veer away from investment schemes offering inflated returns on investments, Senior Sergeant Paul Reeves stated:

“Members of the public should seek advice before making any online investments they are unsure of. Scammers are extremely persistent and can seem very credible, as they are highly versed in their trade. “

The alert also redirected residents to a crypto advisory, by CERT New Zealand, the country’s cybersecurity watchdog. With a quick explainer on the advantages and risks in cryptocurrency investments, the advisory – refreshingly – suggests cryptocurrency adopters to store their coins in offline storage to minimize hacking risks.

As things stand, the cryptocurrency industry is largely unregulated in New Zealand. As reported by CCN in November 2017, the Financial Markets Authority (FMA) – the country’s financial regulator – published its official stance on cryptocurrencies and initial coin offerings (ICOs), deeming them securities.

Within weeks, the FMA had issued an official warning against a teenager’s NZD$220 million cryptocurrency venture that was withdrawn less than a week after its launch.

This post credited to ccn Featured image from Shutterstock.