Most of the prominent financial institutions in Europe like Swedbank and Danske Bank have facilitated large-scale crypto-fiat transactions. A Lithuanian report brought all the deals into the light. They are investigating all the crypto-fiat transactions that happened for two years. Some of the clients of these banks have traded the digital coins that were worth some millions. The Baltic’s nation financial crime combating agency is conducting the investigation in order to know from where did the first million come. Most of the speculators who participated in these deals are Lithuanian taxpayers.
According to the Lithuanian probe, the deals that exceed an amount of 80,000 EUR must be investigated. In the past two years, more than 100 corporate entities and 500 private individuals have been involved in deals which exceeded 80,000 EUR. This has been mentioned in the report provided by FCIS (Financial Crime Investigation Service). This grabbed the attention of the authorities in Tallinn. Delfi reported that all the speculators mentioned above are the clients of any one of the below-mentioned banks or financial institutions- Swedbank, Citadele, Mister Tango, SEB, Danske Bank, Luminor and Pervesk.
The news came into the light after learning that the major banks such as ING group, Credit Suisse, Deutsche Bank, Danske Bank and Citigroup are involved in the money laundering deals.
Lithuanian outlet has quoted data stating that the turnover of the crypto-related operations during the last two years is 661 million euro. The citizens of Lithuania and Sweden are involved in the three largest crypto-fiat transactions. These three large transactions valued 27.2, 16.6 and 14.1 million euro. It has been reported that a resident of Lithuania earned a profit of 6 million euro with these cryptocurrency trading. This has been revealed by Mindaugas Petrauskas, director of FCIS.
FCIS is conducting a strategic sector analysis about the cryptocurrency trading and the exchange transfers that involved the fiat money and cryptocurrencies. The investigators acquired the data related to both the businesses and private traders from the central bank of Lithuania- Lietuvos Bankas and from some other government institutions that are responsible for the regulations of e-money. This will help the investigators to understand the money flow.
Is Money Laundering Back on Table?
Petrauskas stated that some of the speculators declared great profits and huge turnovers. A part of their revenues came due to the cryptocurrency trading while the other was related to the Initial Coin Offerings (ICOs). He stated that the last years’ tax rate in Lithuania for cryptocurrency incomes was just 5%. He also said that most of the traders who are sharing their revenue have not mentioned the origin of their initial capital.
Petrauskas is stressing that there is a high chance of money laundering involvement in both token sales and crypto exchanges. In Lithuania, there is a rapid growth in the crowdfunding sector since the start of 2018. In the year 2017, only 82 million Euros were invested in ICOs but that amount has been gradually increased to 500 million euro in the year 2018 with three and a half months still left. Petrauskas pointed out that “From where have such huge amount of money come? What is their origin?”. He also added that the Financial ministry of Tallinn submitted a set of proposals aiming at the regulation of ICOs.
Lithuanian financial crime combating unit is more concerned about the positives of cryptocurrency such as the anonymity of the transactions, the location of wallets and crypto related services including exchanges as they are present in different jurisdictions and the decentralized nature of the cryptocurrencies.