Deutsche Bank was recently ordered to pay a $150 million fine for „significant failures of compliance“ in its relationship with alleged child sex trafficker Jeffrey Epstein. The Bitcoin community at Reddit is highlighting this latest case of misconduct by major financial institutions.
According to CNBC on Tuesday, New York State financial regulators issued a $150 million fine to the bank for offering banking services to Epstein despite being aware of his previous allegations.
In the consent order under which Deutsche agreed to pay reparations, the regulators show that bank executives were aware of a memo detailing Epstein’s long history of sex crime charges and convictions in Florida. Epstein was charged with soliciting a minor prostitute in 2007, serving 13 months in an unusually lenient prison sentence.
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The bank’s relationship manager focused instead on how lucrative the relationship could be, projecting „$2-4 million in annual revenue over time“ in an email to senior executives. The manager also suggested that accounts be opened for Epstein affiliates, not individuals.
The regulators also punished the bank for supervisory failures while the banking relationship continued. Transactions processed by the bank include transfers to alleged public conspirators, as well as „suspicious periodic cash withdrawals“ totaling US$800,000 over four years.
Epstein was friends with both President Donald Trump and former President Bill Clinton, pushing a popular conspiracy theory that questions the legitimacy of his alleged suicide in a prison cell.
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The Bitcoin community often mentions cases of fraud and corruption in major financial institutions, due to the recurrent categorizations of Bitcoin as a facilitator of crime and money laundering by some Wall Street executives.
In May 2020, a report by investor Goldman Sachs argued that Bitcoin is not an investment asset, citing criminal use.
However, major banks often facilitate money laundering and terrorist financing. The community pointed to several high-profile allegations and convictions, such as the alleged laundering of Mexican drug money by HSBC.
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A 2018 report found that most European banks were fined for money laundering charges in the last decade.
JPMorgan was found guilty of money laundering in several major scandals.
However, one commentator noted that regulators disagreed with Deutsche’s lack of intrusive action on Epstein’s bank. Authorities may have similar concerns with Bitcoin and other crypto-currencies, where such intrusions are impossible by design.
But despite the lack of oversight of cryptomonies, blockchain analysis consistently finds that only a miniscule portion of their performance is criminal in nature.