Denmark’s largest bank has been caught in one of the world’s largest money laundering schemes. Danske Bank’s Estonian branch has allegedly laundered $234 billion USD since 2007, helping residents of Russia, the UK, and other countries clean illicit funds.
An initial investigation into the bank’s money laundering activities revealed that Danske Bank had laundered $150 billion in “questionable money” through its Estonian branch. New information released in a report earlier today, however, shows that the bank has laundered significantly more than that – $234 billion to be exact.
That report comes from Danske Bank itself, which released the results of its internal investigation on Wednesday.
Prior to the release of the report, it had been alleged that $150 billion in questionable funds had been funneled through Danske Bank’s Estonian division by non-resident clients between 2007 and 2015. This latest report revises that number upward, stating that approximately €200 billion was funneled through the exchange.
The money was funneled through approximately 15,000 customer accounts with 9.5 million transactions.
The operation is one of the largest money laundering scandals ever uncovered.
The news is so big that Denmark’s Prime Minister has released a statement. Danish PM Lars Lokke Rasmussen was quoted by the Financial Times saying,
“I’m shocked. The numbers that came out today are of an astronomical magnitude. It is, f course, deeply disappointing that a bank that I consider to be an important player for Denmark has become involved int his kind of activity.”
The investigation involved analyzing 12,000 documents and more than 8 million emails. Investigators, led by the Brunn & Hjejle law firm, also conducted 70 interviews with current and former employees and managers. By the end of the investigation, the team had identified 6200 “high risk customers” and found that “the vast majority of these customers have been deemed suspicious.”
The targeted customers include residents of Russia, the United Kingdom, and the British Virgin Islands.
In response to the scandal, Danske Bank’s CEO has resigned. CEO Thomas F. Borgen was appointed as CEO in 2013. Between 2009 and 2012, he ran Danske Bank’s international banking division, which included oversight of banking operations in Estonia.
Said the outgoing CEO in a statement:
“It is clear that Danske Bank has failed to live up to its responsibility in the case of possible money laundering in Estonia. I deeply regret this…I believe that it is best for all parties that I resign.”
The news was quickly picked up crypto news outlets like news.bitcoin.com, which tends to report on any illicit activity in the mainstream financial industry.
Crypto news outlets report stories like this because it highlights that illegal activity occurs in all types of financial transactions – whether on decentralized networks like bitcoin or in centralized institutions like Danske Bank. Regulators, however, seem to particularly target cryptocurrencies for being a facilitator of criminal activity.
The amount of money laundered in this latest (alleged) operation is more than the entire market cap of all cryptocurrencies combined. The crypto industry’s market cap currently sits at around $202 billion, while a single division of a Danish bank in Estonia appears to have laundered $234 billion. So why is crypto being single handedly blamed for facilitating illegal activity?