Lithuanian Probe Investigates European Banks Facilitating Large Crypto to Fiat Transactions


Probe Finds European Banks Facilitated Major Crypto-Fiat Deals

Several banks in Europe such as Swedbank and Danske Bank have been cited in a Lithuanian report that has been investigating large crypto-fiat transactions. The report covered transactions that took place over the last two years. Some of the clients of these banks traded crypto coins worth millions of euros. The Lithuanian financial crimes agency now wants to know the origin of the first million. Most speculators in the European crypto industry are from Lithuania.

Seven Banks Were Involved in Trading Crypto Worth €661 Million

This report by the Lithuanian authorities covered any deal that was worth over €80,000. The agency found that over 5000 individuals and over 100 corporates conducted such transactions from 2017. This raised eyebrows amongst regulators in Tallinn.

It was further revealed that all major clients belonged to one of the following financial service providers – Swedbank, SEB, Citadele, Danske Banks, Mister Tango, Pervest, and Luminor. This news comes hot on the heel of revelations that large banks such as Danske Bank, Credit Suisse, INS Group, Deutsche Bank, and Citigroup were mentioned in reports on money laundering.

According to data from a Lithuanian outlet, the turnover in these crypto operations in the two-year period had reached €661 million. Citizens of the nation and Sweden are behind the three biggest transactions. These transactions were valued at 27.2, 16.6, 14.1 million euros. The report also revealed that a Lithuanian citizen had made profits of €6 million trading crypto.

Lithuania’s financial crime agency, the FCIS is conducting a strategic analysis of exchange transfers that involve crypto and fiat currency. They are targeting EUR, USD, and other fiat currency. Thus far, investigators have gathered data from businesses and individuals from the central bank of Lithuania and other institutions that oversee e-money regulation. The aim is to examine how the money is flowing.

There Are Suspicions of Money Laundering

The director of the financial crimes agency, Petrauskas, said some speculators were not just declaring huge turnovers but huge profits as well. Part of the revenue was from crypto trading while the rest was from ICOs. He noted that the tax rate for last year for crypto income was just 5%. The director added that many of the traders did not reveal where the initial capital for their investment came from.

Due to this, the director said that there was a high risk of money laundering in crypto trading and Initial Coin Offerings (ICOs). Since the start of 2018, the crowd-funding sector of Lithuania has experienced a lot of growth. In 2017, there was only about €82 million invested in ICOs, that figure has jumped to €500 million thus far.

The director said the agency was interested in knowing where all the funds came from since that was a lot of money. He added that the Financial Ministry in Tallinn had submitted proposals that were aimed at regulating ICOs in the nation.

Summary

The financial crimes agency in Lithuania has exposed real concerns in the crypto industry. What makes this worse is anonymity in the crypto world and the fact that crypto services such as wallets and exchanges are usually located in different jurisdictions.

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