Firms from Russia and several parts of the former Soviet Union have allegedly turned the tiny nation of Estonia into a money laundering haven. An ongoing investigation into the Estonian branch of Danske Bank is combing through a large $150 Bn that may have been largely involved.
Investigators at Danske Bank (CPH: DANSKE), the biggest financial institution in Denmark, are purportedly examining up to $150 billion worth of transactions that passed through its Estonian branch between 2007 and 2015. While it's more liable, not all of the questionable funds are from an illicit source, this is a spring by an order of relative size from the bank's imagined figure at first considered to be involved with rampant money laundering by Russian and several Eastern European firms.
In 2017, reports from Danish media outlets show the suspected laundered funds at $3.9 billion but surprisingly, in early July this year, that figure leaped to between $8 - $9 billion. And earlier in September 2018, FT reported that approx $30 billion may be dodgy. The stock price of the bank has taken a significant hit from the great success.
“Any conclusions should be drawn on the basis of verified facts and not fragmented pieces of information taken out of context,” Danske Bank chairman Ole Andersen told the Wall Street Journal which brought up the $150 billion figure. “As we have previously communicated, it is clear that the issues related to the portfolio were bigger than we had previously anticipated.”
As per Estonian law, a person may be sentenced to up to 10 years in jail for participating in an organized money laundering scheme. However, a firm guilty of money laundering is subject to a maximum fine of only €16 million.
In July this year, the Bank's Board announced it plans to relinquish all income from questionable transactions in Estonia and put it to services that will benefit society.
“This is something we deeply regret and which we should not benefit from financially in any way. Therefore we will not keep the income from these suspicious transactions,” CEO Thomas F. Borgen, said at the time.
Some experts in the crypto community state that money laundering is a problem of global scale. Dima Vol, the Global Ambassador at the Mile Unity Foundation project aimed to promote XDR stablecoin across the sector of retail, b2b and intergovernmental payments (g2g) for faster and secure transactions with lower fees, told Coinidol:
“Public and stable blockchains can be the best transparent tool for banks to check all the local and international remittances, because it's not possible to lose or change information. In the next few years, we will see some experiments that will be used in banking. Finally, the result will depend on how international community will build cooperation between financial institutions.”