Business 22 October 2018

Erik Gibbs

Crypto’s the bad guy? European banks reportedly help users steal $63B

Traditional financial institutions, and their pundits, love to argue that cryptocurrency is only good for those who want to steal, deal in drugs or launder money. While many superficial reports have suggested that there is more evidence of theft in the fiat ecosystem, there is now tangible proof. A new report by undercover journalists has revealed that banks across Europe helped their clients illegally take $63 billion in taxes.

The undercover operation was led by 37 journalists in 12 countries. The work conducted by the undercover agents was published in a report called the CumEx Files, which was the result of a review of 180,000 documents from banks, law firms and stock traders over the span of one year. The journalists always conducted interviews with whistleblowers and unidentified individuals to confirm what the documents revealed.

According to the report, “They [the secret documents] demonstrated the extent to which banks and investors could reimburse taxes on stock deals that they did not have…These windy financial constructs are called cum-cum (cum means ‘dividend’). A domestic bank helps a foreign investor to get a tax refund that they are not entitled to. The profit is shared between the participants.”

In some instances, traders were able to collect refunds that were twice what was owed, or more. The refunds came from the respective countries for taxes that would normally be paid one time for the purchase or sale of a particular stock.

A separate video published on the CumEx Files asserts, “It was a trade that was initially discovered by chance. Yet a group of masterminds turned it into an industrialized cottage industry, from Dubai to London, New York to Dublin taking billions of euros out of the pockets of European tax payers.”

Involved in the scheme, according to the report, are Barclays, JPMorgan, BMP Paribas, UBS, Morgan Stanley, Banco Santander, Meryl Lynch, Deutsche Bank and SEB bank out Sweden. In one example, tax evaders were able to reportedly abscond with $2 billion from Denmark’s government. In another, $46 million was almost stolen from Sweden, but was thwarted only because Danish authorities tipped off their counterparts in the country.

The report’s authors further asserts, “The deals are solely for the purpose of collecting taxpayers’ money. Otherwise, there is no value behind the trade.” They stated that the schemes coincided with the financial crisis that hit in 2007 and 2008, adding that it was “a time when the state will save the banks from collapse, again with taxpayers’ money.”

Obviously, lawmakers across Europe are now calling for action. They are preparing to launch an investigation into the report. This means that they’ll have less time to dedicate to real, non-penal issues, such as creating the framework for digital currencies to flourish.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

Bitcoin Satoshi Vision (BSV) is today the only Bitcoin project that follows the original Satoshi Nakamoto whitepaper, and that follows the original Satoshi protocol and design. BSV is the only public blockchain that maintains the original vision for Bitcoin and will massively scale to become the world’s new money and enterprise blockchain.

COMMENT

latest news

Blockchain, Brexit, and Ireland: What will happen?

Business 7 hours ago

Blockchain, Brexit, and Ireland: What will happen?

The economic uncertainty has led many to believe that cryptocurrency might be able to play a role, since traditional currencies might not be able to stabilize through the crisis.

Read More
Cryptopia outlines eventual return as exchange resumes trading

Business 7 hours ago

Cryptopia outlines eventual return as exchange resumes trading

Co-founder Rob Dawson categorically denies that an exit scam took place, and points out that Cryptopia actually plans on reopening. For now, the crypto exchange has resumed trading on 40 various crypto trading pairs.

Read More
Galaxy Digital invests $5.25 million in Bison Trails

Business 8 hours ago

Galaxy Digital invests $5.25 million in Bison Trails

After investing his clients money at the worst possible time, Stefanos Papanastasiou is being sued for losing most of the money.

Read More