Tuesday, October 30, 2018

Hitachi, State Bank of India to develop ‘future ready’ digital payments platform

 


Digital payments is coming to India, a country considered to be one of the largest cash dependent nations in the world.

This week, Hitachi Payments announced that it has entered into a joint venture with the State Bank of India (SBI) to establish "a state-of-the-art card acceptance and future ready digital payments platform for India."

Under the deal, Hitachi Payments will invest 26% to SBI Payment Services Pvt. Ltd., and will also provide SBI with innovative solutions using its Internet of Things (IoT) platform Lumada.

Hitachi has been SBI's technology provider for card and digital services since 2011. The new partnership between the two companies is going to oversee the development of a nationwide digital payments platform. The platform will be geared towards solutions for ecommerce and mass transit in India integrated with Point-of-Sale (POS) solutions.

Bharat Kaushal, managing director of Hitachi India explains, "India is progressing towards becoming a knowledge economy with technology as the pivot. Hitachi is aiding in the development of India's social infrastructure as well as giving a fillip to the economy. This mutually beneficial partnership with the financial giant SBI will allow us to widen our footprint pan India."

Hitachi's Lumada platform was implemented as the base platform for Mizuho Financial Group, a Japanese firm last year. The Lumada platform functions over a blockchain proof-of-concept (POC) network. Hitachi reportedly has about 55,000 ATMs and 850,000 point of sale (POS) devices under management in India. Hitachi is also a part of the multi-project open source collaborative effort hosted by The Linux Foundation.

On the other hand, SBI is a founding member of BankChain, a blockchain for banking research consortium. SBI has also been developing a blockchain solution since 2017 for managing know-your-customer (KYC) protocols. SBI is the largest commercial bank in India and has a 23% market share of assets market. The bank also serves over 420 million customers and maintains over 6 million POS terminals across the country.

Wednesday, October 24, 2018

Bitcoin Cash Organizations Start Preparing for the November Hard Fork

 

As the days draw closer to the scheduled Bitcoin Cash upgrade, affiliated organizations are preparing for the hard fork. Data websites like Coin Dance have added statistics for feature support, upgrade voting, and public opinion. Meanwhile, the Nchain-backed SV-Pool has officially announced that its pool is now open to public miners.

SV-Pool Goes Public
The Bitcoin Cash hard fork slated for Nov. 15 is getting closer and network participants are preparing for the upgrade in several ways. On Oct. 22, the mining initiative SV-Pool, supported by Nchain and the firm's chief scientist Craig Wright, announced the pool is now open to the public. This means that Bitcoin Cash miners can direct their hashrate towards the SV-Pool and get paid by an initial pay-per-last-n-shares (PPLNS) system. The pool details it plans to add more payment structures this November. At the time of writing, according to Coin Dance statistics, SV-Pool has been capturing around 2.6 percent of the global BCH hashrate over the last seven days.

According to the pool's recent announcement, SV-Pool says it stands by a "miners' choice, miners first philosophy." News.Bitcoin.com reported on the pool's first mined block on Oct. 10 and at the time SV-Pool was using an invitation-only beta period. During that time, the Bitcoin SV team launched its codebase and the Bitcoin Unlimited (BU) team also launched a new client. The latest BU code is prepared for the Bitcoin ABC team's ruleset changes and the team stated on Twitter that SV ruleset compatibility was "pending." BU's plan is to let the miners vote for features by using a system called the BIP135 bits standard.

Explicit Mining Pool Support and Public Opinion
Following the recent announcements concerning new clients and BIP135, the statistical data website Coin Dance has prepared its website for things like explicit mining pool support by proposal and a new politics and public opinion section. The explicit mining pool support section, which seems to incorporate the most important data to most BCH proponents, currently says that "Voting should begin shortly." The politics and public opinion section is a different story as it shows a list of BCH-supporting businesses and organizations revealing specific proposal stances.

As of Oct. 23, there are 15 organizations listed on the page which Coin Dance details is a "weighted community-managed support breakdown by company for each active Bitcoin Cash proposal." The three choices include support for BIP135, Bitcoin SV, and Bitcoin ABC's ruleset proposals. Companies and organizations represented on the list include Bitcoin ABC, Unlimited, XT, Cryptograffiti, Coingeek, Nchain, Coinex, Blockchain Ventures, and more. People visiting this weighted support breakdown can see whether or not each firm supports a certain ruleset proposal. Coin Dance is allowing company submissions and a form can be filled out that requires the organization to be publicly accessible, indicate explicit choices, and source references.

There are only 23 days left until the scheduled hard fork, and so far it is hard to determine how the upgrade will play out, even for those constantly watching and listening to the BCH community. Most BCH supporters are more concerned with the miners' explicit decisions over a weighted community-managed poll system. Miners don't have to run BU in order to vote using the BIP135 bits standard, as they can also set the bits in their block version fields using mining pool software.

CoinGeek-sponsored Bitcoin BCH Miners Choice Summit happens in Hong Kong on November 2

 


When the August 2017 Bitcoin Cash hard fork took place, it did not really create a new coin. Instead, Bitcoin Cash (BCH) was the rebirth of the original Bitcoin, designed to stay to true to the Satoshi Vision (SV).

With Bitcoin BCH, the roadmap is for massive on-chain scaling by significantly increasing the block size, enabling fast transaction processing, and keeping transaction fees very low. The key BCH developer groups have had some differences about how quickly BCH should scale, and the dangers of developer groups constantly trying to experiment with proposed technical changes to the Bitcoin protocol.

CoinGeek-sponsored Bitcoin BCH Miners Choice Summit happening in Hong Kong

Now we have Bitcoin SV, the new full node implementation for Bitcoin BCH that will restore the original Satoshi protocol, keep it stable, enable it to massively scale, and allow major businesses to confidently build on top of BCH. By trusting the original design of Bitcoin rather than constantly changing it, Bitcoin SV will support global adoption, enterprise-level usage of BCH, and allow miners to earn more longer-term revenue.

To gain more insight about Satoshi Vision, as well as Bitcoin SV and SVPool, miners are invited to attend the CoinGeek-sponsored Bitcoin BCH Miners Choice Summit, taking place at The Harbour Grand Hotel in Hong Kong on November 2.

The dynamic half-day conference will feature the industry's most exclusive guest speakers, including nChain Chief Scientist Dr. Craig S. Wright and nChain Group CEO Jimmy Nguyen, along with CoinGeek Mining's Bob Yuan, one of the most respected mining professionals in China. More speakers will be announced soon.

Recently, Dr. Wright launched his personal initiative—the public Bitcoin BCH mining pool SVPool—to all public miners on the Bitcoin BCH network. SVPool represents BCH miners who support the Satoshi Vision and want to generate more long-term revenue. BTC miners who believe in Bitcoin's original vision are also invited to begin mining BCH with SVPool.

Wright explained: "If you believe in Bitcoin's original vision, you believe in Bitcoin SV and SVPool. For too long, developer groups have repeatedly tried changing Bitcoin. The original Satoshi protocol for Bitcoin does not need to be fixed. It has everything BCH needs to massively scale, support tokenization, smart contracts and other advanced features, and become the only global public blockchain. Just like the Internet has a stable protocol, Bitcoin needs a stable protocol so businesses can build upon a rock solid foundation rather than constantly moving sand."

The CoinGeek-sponsored Bitcoin BCH Miners Choice Summit is an event not to be missed. Seats are limited, so best to RSVP now to RSVP@svpool.com to confirm your attendance at this iconic event.

Miners are also invited to take part in the CoinGeek Week Miners Day, happening during the CoinGeek Week Conference in London this November. The SVPool and CoinGeek Mining team will be on-hand to discuss how you can do your part in making Bitcoin BCH realize its full potential. Secure your seat today via Eventbrite for the three-day conference that's shaping up to be the essential Bitcoin BCH conference this fall.

The Bitcoin SV project was created at the request of and sponsored by Antiguan-based CoinGeek Mining, with development work initiated by nChain. The project is also owned by the Antiguan-based bComm Association on behalf of the global BCH community, and the Bitcoin SV code is made available under the open source MIT license.

Thursday, October 18, 2018

Security Giant G4S Offers Protected Offline Cryptocurrency Storage

 


G4S (LSE: GFS), a security services provider with operations in more than 90 countries, guards everything from cash transfers to nuclear power plants and prisons. The London-headquartered company has now started to offer cryptocurrency protection, according to a recent report.

Secure Vault Storage
The company, which has more than 560,000 employees throughout the world, announced on Wednesday that it has developed a new service providing high-security offline cryptocurrency storage, to help to protect assets from criminals and hackers. And the company is already providing the service to an unnamed European exchange, according to the Financial Times. It charges clients based on the number of different offline storage devices they want to use to store their private keys, and reportedly uses its own existing vaults for the service, rather than newly built facilities.

The company's press statement confirmed that cryptocurrency exchanges are already turning to them for help. Dominic MacIver, senior risk analyst at G4S Risk Consulting, commented: "Our clients approach us to discuss solutions to their requirements because of G4S Cash Solutions' experience in protecting high-value items and G4S Risk Consulting's experience in developing bespoke solutions to complex challenges. Working with our clients, we are continuously applying their expert knowledge of crypto-assets and our best practice in physical security to a sector at the cutting edge of financial technology."

Heavily Restricted Access
The service is said to be more secure then other methods because G4S takes the keys offline, breaks them up and stores them in high-security vaults. Moreover, access to the sites in which they are held is said to be heavily restricted, with multiple layers of security. Clients can only gain access when all of the pieces are combined with specific technology.

"Offline storage has become a more established and secure way of storing crypto-assets," MacIver said. "At the same time, violent robberies and kidnappings in recent years have shown that the sector is still exposed to conventional criminal threats. In collaboration with our client, our security solution is built on a foundation of 'vault storage.' We not only take the assets offline, but break them up into fragments that are independently without value and store them securely in our high security vaults, out of reach of cyber criminals and armed robbers alike."

Bitmain predicted to be knocked from relevance; US tariffs of 27.5% now apply

 

Bitmain's planned initial public offering (IPO) was already facing significant resistance due to the myriad of issues and controversies plaguing the company. However, the future now looks even less bright, thanks to President Donald Trump.

The ongoing trade war between the U.S. and China will undoubtedly impact cryptocurrency mining equipment. This past June, the U.S. changed the classification of the mining rigs from "data processing machines" to "electrical machinery." Electrical machinery is subject to an import tariff of 2.6%—not unreasonable for any product. However, because of the trade war, the tariff schedule has been updated significantly. Instead of 2.6%, mining equipment manufacturers are now looking at the possibility of paying 27.6%.

Competition in the mining equipment manufacturing space is getting more serious. More than half of Bitmain's business relies on overseas sales. With the increased tariffs, the company will have a difficult, if not impossible, time offering products at prices that can beat those of its competitors.

Some of Bitmain's primary competitors, such as Squire, use chips manufactured in South Korea. These are not subject to the tariff schedule, nor are those produced in Taiwan. This will not only give companies that source products from these countries an edge, but it will also give rise to new competitors who will threaten Bitmain's ability to act in the mining space.

The company even recognized in its IPO filing that there existed the possibility it could be impacted by external forces. It said that its revenue could see declines based on tax rates "due to economic and political conditions." As Bitmain is already losing ground to competitors who are now producing mining rigs that are faster and more efficient, the tariffs could be the proverbial nail in the coffin that brings an end to the highly questionable IPO.

CoinGeek was already prepared for this eventuality, which is why the introduction of Antiguan-based bComm Association's Bitcoin SV (developed by nChain) is vital to the mining community. The full-node implementation software is now available and is quickly gaining favor. Don't just take my word for it—come check it out during Miner's Day at the upcoming CoinGeek Week Conference in London next month.

Thursday, October 11, 2018

A Bitcoin Rat Is Occupying Wall Street

 


Ten years after the financial crisis of 2008, an artist known as Nelson Saiers has placed his latest artwork across the street from the New York Federal Reserve building in the financial district. The piece is a giant sized and menacing-looking inflatable rat covered in Bitcoin code. The former Wall Street hedge fund manager and mathematician dedicates most of his time these days to his artisan loft where he produces visuals depicting the broken financial system.

A Visual Perspective of Finance and Art
Nelson Saiers giant-sized inflatable rat is covered in bitcoin code and is looking directly at the New York Federal Reserve.
There's some new street art located across the street from the New York Federal Reserve building that's been causing some attention. A tall balloon-like white rat covered in bitcoin code is tied to the ground looking like it's about to attack the structure. Nelson Saiers devotes his energy to artistic pieces that shine a light on the traditional finance system we deal with today. Saiers financial artwork has made headlines over the years after he left his trading position in 2014. 

The 8 ft white rat covered in Bitcoin code staged across the street from the central banker's lair represents an interesting time in history, because it is ten years after the 2008 financial crisis. Additionally, Oct. 31, 2018, marks the tenth anniversary of the Bitcoin white paper published by Satoshi Nakamoto. The inflatable white rat's creator, who is also known as the "Warhol of Wall Street," explained in an interview on Oct. 9 with Shreyas Chari his latest artwork does give a representation of these anniversary dates.  

"So this piece is slightly different from the inflatable rats you see around the city. It's loaded with Bitcoin code and a couple related equations," explained Saiers during the interview.

Saiers adds:  
About ten years ago, while TARP was bailing out the economy, Satoshi Nakamoto wrote this code along with the words; '03 Jan 2009 The Times, Chancellor on brink of second bailout for banks,' referencing the equivalent in England — Satoshi seemed pretty opposed to centralization and said it was doomed in the end. I wanted to be true to his views and reflect this in the artwork.

The Infestation of Sewer Rats
Over the last two decades, street art depicting the world's financial inequalities has become a significant movement globally. The prominent and controversial street artist Banksy has brought the art-form to a new height and the use of rats can be seen on lots of walls covered in graffiti throughout the past two decades.

The rat has been used in financial street art for two decades and has been popularized by the anonymous artist Banksy. Andreas Antonopoulos has also referred to Bitcoin as a "sewer rat." 
Banksy himself said the rat is something to look up to because these animals do whatever they want. "If you feel dirty, insignificant or unloved, then rats are a good role model. They exist without permission, they have no respect for the hierarchy of society," the artist explains in his writings. The innovation of cryptocurrency itself has been depicted as an uncaring 'honey badger of money' or anarchistic street rat many times over the years.  

In 2016 the computer scientist Andreas Antonopoulos referred to the Bitcoin protocol as a "sewer rat of currencies."       

"Bitcoin isn't living in a bubble — Bitcoin is a sewer rat," Antonopoulos detailed during his speech. "It's missing a leg. Its snout was badly mangled in an accident last year. It's not allergic to anything — In fact, it's probably got a couple of strains of bubonic plague on it which it treats like a common cold. You have a system that is antifragile and dynamic and robust."

Bitcoin Street Art Isn't Going Away Anytime Soon
Over the last two years or so Bitcoin and street art have melded together and many artists have been using the cryptocurrency for symbolism on walls. In Paris, France there's an artist named Pascal Boyart aka "Pboy," who leaves his cryptocurrency themed art and QR code on buildings throughout the city. The artist Cryptograffiti has made a name for himself as he spreads his Bitcoin-infused art across various cities within the US.

Bitcoin street art by Pascal Boyart aka 'Pboy.'
Saiers latest artwork and the many other artists located around the world shows there's a growing trend of mixing visually entertaining financial and political symbolism with cryptocurrencies. The artist's Bitcoin rat, however, is not permanent and Saiers has plans to remove the inflatable after the display.

Russian crypto exchange YoBit advertises pump scheme

 

Russia-based cryptocurrency exchange YoBit has announced a scheduled pumping of coins selected at random.

In its tweet, YoBit gave no specific reasons for its action, wherein "we will buy one random coin for 1 btc every 1-2 mins 10 times (total buy amount – 10 btc)." The exchange, which lists thousands of altcoins, also provided a timer 22 hours prior to the trades. As of this writing, there are six hours left before execution of the scheme.

We can only wait to see the effect on whatever coins are selected, but the tweet is notable for its unusual nature. Usually, when an asset is bought in the hopes of spurring demand from other investors, it is done more discreetly, so as to sell at a peak.

Last February, the U.S. Commodity Futures Trading Commission (CFTC), which has classified cryptocurrencies as commodities under its jurisdiction, had already warned the public of pump-and-dump scams, saying, "As with many online frauds, this type of scam is not new-it simply deploys an emerging technology to capitalize on public interest in digital assets." It remains to be seen, however, how regulatory agencies will react, given the forthrightness of the exchange.

Commenters on the YoBit tweet expressed disbelief, amusement, and outrage, as well as cluelessness. Several users on reddit have confirmed the existence of e-mails sent by the company, with address news-mailer@yobit.net, indicating that the exchange had not been hacked.

Already, trading platform Coinigy has tweeted its plan to delist YoBit from its network of cryptocurrency exchanges, "due to overwhelming negative experiences as documented on social media and forums, among other reasons." However, it said it would be "asking for feedback first. As a popular platform in the crypto trading space, it is essential for us to be diligent and not promote sites that may harm our users."

YoBit has been operating since 2015.

Tuesday, October 2, 2018

New Research Claims Most ICOs Have Profited Off Selling ETH

 


New Research Claims Most ICOs Have Profited Off Selling ETH
Bitmex Research is back with another detailed report, this time into the ethereum holdings of ICOs. Ethereum's downward trajectory has been attributed in some quarters to ICOs offloading ETH to pay the bills. If so, data suggests that those projects have profited handsomely off their ETH holdings in USD terms, despite its falling price.

Ethereum's tanking price, sliding from over $1,400 to below $200 in seven months, has alarmed many cryptocurrency investors. ETH is the backbone of the ICO economy, and its inability to sustain support levels against BTC has led to fears of there being a run on ethereum, akin to that which occurs when customers fear a bank lacks the funds to cover its liabilities. If Ethereum projects believe the cryptocurrency is likely to drop further, they will feel pressured to sell in order to maximize their capital, further accelerating the token's decline.

Commenters have been in disagreement over the extent to which ICOs cashing out has triggered ETH's downfall. Dapp Capitulation has been the go-to tool for anyone trying to keep track of which ICOs are moving ETH (presumably with the intention of selling) and when. In the last 30 days, for example, Status has sent 8,000 ETH to an exchange wallet and Decent has moved 20,000. New research from Bitmex and Tokenanalyst, however, provides a more holistic picture of ICO movements of ethereum. Its key finding?

Rather than suffering because of the recent fall in the value of ethereum, at the macro level, the projects appear to have already sold almost as much ethereum as they raised (in US$ terms).

The Coffers of Last Year's ICOs Are Not Yet Empty
In determining the profit or loss realized by Ethereum-based tokensales, Bitmex Research has created two columns: one for EOS and the other for everything else. Since EOS raised about as much as the rest of the market put together during its year-long fundraiser, it was necessary to record it separately to avoid skewing the data. A macro analysis of 222 ICOs found a total of 15.1 million ETH was raised, of which 11.3 million has been transferred out or sold. This leaves a remaining collective balance of 3.85 million ETH. Since EOS has offloaded all its ETH, this sum is shared among the other 221 projects.

The most useful data provided by Bitmex Research and Tokenanalyst is a calculation of whether ICOs that have sold a lot of ether can be expected to have made a profit or a loss. Broadly speaking, the older the ICO, the likelier it is to have profited from its ETH holdings. Projects that raised funds in late 2017 or this year, on the other hand, are almost certain to have seen the value of their crypto assets dwindle. Overall, the report finds non-EOS projects to have recorded net realized gains of $727 million through selling ETH, and to be sitting on another $93 million in unrealized gains i.e. ETH they've yet to sell.

Some Big Winners and a Few Losers
Not all projects have prospered: it's estimated that $34 million in ETH has been lost by projects being forced to liquidate their holdings at below the value they held during their crowdsale. The report concludes: "Despite the 85% reduction in the ethereum price from its peak, the projects have realised gains of US$727 million due to profits from ethereum they have already sold, often selling before the recent price crash. The 3.8m ethereum still on the balance sheets of these projects may not have that much of an impact on the ethereum price, as it represents a reasonably small proportion of the 102 million supply of ethereum. At the same time, on a macro level, the projects may be feeling reasonably confident rather than needing to panic sell."

Luke attacks Roger, is proven wrong, deletes evidence, fails to apologise

 


This time last week was a day Bitcoin Core developer Luke-jr would rather forget. It all started when the Core developer took note of a tweet by @TheCoinDad asking him "Why is your name popping up on Rogers screen at the WDMS?" This was of course, during a Roger Ver talk at the World Digital Mining Summit where we had the below image on display.

The slide during Roger's presentation attributes the quote, "It is no longer possible to keep fees low," to none other than Luke. It's not the first time this quote has been used in a Roger Ver presentation, and there are interestingly numerous references scattered across the internet concerning it.

It didn't stop Luke-jr however, from jumping into a tirade, where he tweeted "Roger Ver is a scammer and tends to fabricate false quotes. This isn't the first time (and probably won't be the last) I've found out about things I've "said" through a third party…"

Luke attacks Roger, is proven wrong, deletes evidence, fails to apologise

While Luke's supporters jumped the bandwagon in support, some other users were quick to do their own research, and were quick to point out the very source of the original comment made by Luke.

Luke attacks Roger, is proven wrong, deletes evidence, fails to apologise

Source: reddit permalink

What's more interesting is that the quote was verbatim, and none of it was taken out of context.

As evidence mounted, shortly thereafter, Luke 'Dashjr' deleted all evidence of the tweet, and issued no apology to Roger for his premature outburst.

Unfortunately for Luke, the Internet is a little bit like the blockchain. What happens on the internet, tends to stay on the internet.

Wednesday, September 26, 2018

Malaysia wants to put major industries on blockchain

 

The Malaysian government is seeking to utilize blockchain to increase transparency, sustainability and logistical efficiency of its three largest industries—renewable energy, palm oil, and Islamic finance.

According to reports, the government has appointed a task force named the Malaysian Industry-Government Group for High Technology (MIGHT) to oversee the blockchain adoption. Mastura Ishak, program director at MIGHT, told GovInsider: "Blockchain is interesting because it allows small players to have a say about what's going on."

The Malaysian government believes that adopting blockchain in the renewable energy industry will help bring new players to the table and increase energy production in the country. Currently, Tenaga Nasional Berhad (TNB) is the only utility provider in the country.

The new project will allow private solar panel owners to sell any excess electricity they have. In the new system, electricity sellers will be required to state how they are generating their electricity, while consumers will have the choice of deciding which sources of electricity they would like to use.

By allowing private solar panel owners to sell their surplus electricity, the country will also save up on the electricity lost during long-distance distribution.

For the palm oil industry, the Malaysian government hopes blockchain will help bring major changes that will improve the country's economy. Palm oil is Malaysia's biggest export, accounting for about 43.1% of the country's agricultural income.

Palm oil has been facing problems for quite some time now. This happened after reports emerged associating the industry with bad practices and child labor. MIGHT believes blockchain adoption can help identify certified palm oil operations which will help eliminate illegal operations. The government will also be able to monitor and regulate the operations.

Finally, there's Islamic finance. Islamic laws state that money has to be based on real commodity and cannot be created from more money. The strict nature of Islamic laws have caused high overhead costs on the industry, which is reflected in the country's economy. The government is looking at how they can offset these costs while also adhering to Sharia laws. Blockchain and the adoption of smart contracts could help offset some of these costs.

Another win for crypto: Bank giants fined billions for malpractice

 


First, Visa and MasterCard settled a class-action lawsuit over price fixing that reportedly cost the credit card giants as much as $6.2 billion. Now, reports are surfacing that major banks could be fined as much as $400 billion by 2020 for malpractice. So much for crypto being the bad guy, as traditional finance pundits would have everyone believe.

Quinlan and Associates indicates that research into U.S. and European banks could potentially face the huge fines by regulators. The majority of the penalties are a direct result of the financial crash from 2008. The $400 billion does not include fines from other areas, such as unfair billing practices or money laundering.

Last Monday, JP Morgan Chase was fined by the Commodity Futures Trading Commission (CFTC) $65 million after it was found guilty of not doing enough its part to protect the U.S. Dollar International Swaps and Derivatives Association Fix (USD ISDAFIX) from 2007 to 2012. ISDA was established in 1998 and ISDAFIX is a reference rate value for fixed interest swap rates, correlated to dollars, pounds, Swiss Francs and Euros.

The CFTC said that JP Morgan published false interest rates just prior to the daily reference was captured between the five-year period. In submitting false data, the firm saw its derivatives positions benefit at the expense of other interest rate products that used the same common interest rate value.

BNP Paribas also received a hefty fine from the CFTC. The bank was ordered to pay $90 million after investigators determined that traders in the bank's investment wing were actively bidding and executing trades at the moment the ISDAFIX was being released. This enabled them to influence the index, which impacted foreign exchange benchmark rates. The CFTC also fined the Royal Bank of Scotland $85 million for illegal practices similar to those of JP Morgan and BNP.

Some may recall that another bank, Well Fargo, has had its share of financial difficulties and missteps every year for the past couple of years. Most recently, the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau hit the bank with fines of $500 million each after they determined that the bank had set unfair mortgage interest rates and forced customers to sign up for unnecessary car insurance.

Traditional financial giants may try to argue against crypto until they turn blue, but the truth is that crypto offers better protection and more transparency—and more confidence—than do the banks.

Wednesday, September 19, 2018

Denmark’s Largest Bank Took Two Years to Close Accounts of Blacklisted Russian Clients

 

Denmark's largest bank, Danske Bank, reportedly knew that some of its Estonian branch's clients were on the Russian government's blacklist but did not close their accounts for two years. The bank is currently being probed by three countries over $150 billion money laundering allegations.

Danske Bank is currently under investigation by authorities in three countries: the US, Denmark, and Estonia. Its officials reportedly "knew earlier than previously indicated about problems at its tiny Estonia branch, including that it held accounts for blacklisted Russian clients," The Wall Street Journal reported Tuesday, citing correspondence it has seen. The publication elaborated:

Officials at Danske Bank were aware almost two years before it started shutting questionable accounts that the small but highly profitable branch was involved in potentially illicit money flows.

The Estonian branch was one of the bank's profit drivers, generating a net profit of €63 million (~US$73.5 million) in 2012, the most lucrative year. The whole bank reported €636.6 million (~$742.6 million) in net profit that year, the publication noted.

The largest bank in Denmark has been at the center of one of Europe's largest money laundering cases. Between 2007 and 2015, an estimated $150 billion was suspected to have flowed through the branch to accounts belonging to non-Estonian customers including Russian clients. However, the bank has not confirmed how much of that figure comes from suspicious transactions. It has launched an internal investigation and is expected to announce the results on Wednesday, Sept. 19.

Discriminating Email
According to the Wall Street Journal, an April 2013 email reveals that the bank's anti-money laundering (AML) chief based in Denmark had asked colleagues in the Estonian branch "about client accounts whose owners appeared on a blacklist generated by Russia's central bank." The Bank of Russia keeps a database of individuals and companies suspected of financial wrongdoing which it shares across borders. The list currently has about 500,000 names.

The Estonian Financial Supervision Authority (FSA) said on Tuesday that "it repeatedly complained to Danish counterparts about the branch's blacklisted customers," the news outlet conveyed, adding that in a 2013 email, Niels Thos Mikkelsen, the bank's then-compliance executive, wrote:

"They have the impression that we do not take the issue seriously."

Furthermore, the news outlet added that a spokesman for the Danish FSA pointed out that a reprimand ruling against Danske Bank in May states that the authority received "misleading" information from the bank between 2012 and 2014. Danske claims the information came from the branch.

While the Financial Times recently reported that Thomas Borgen, the bank's CEO, was notified in October 2013 about suspicious transactions at the Estonian branch, Borgen insists that "he was not informed in detail at the time about the problems," Reuters described on Tuesday, elaborating:

"The Danske Bank case has led to speculation in Denmark that its chief executive Thomas Borgen, who was in charge of its international operations, including Estonia, between 2009 and 2012, will step down."