Major French Banks Raided in $108B Money-Laundering and Tax Fraud Investigation

While the digital asset market is once again finding its footing after news of the CFTC targeting Binance broke – in what is just the latest example of enforcement action against major industry players – 5 major banks have just been raided in France in a massive fraud investigation.  Those involved in the suspected $108B web of money laundering and tax fraud??

• BNP Paribas
• Exane
• HSBC
• Natixis
• Société Générale

Early reports indicate that the investigation, which has been put together over multiple months behind-the-scenes, is based on ‘Cum-Cum' tax fraud; a Latin phrase used by the French Financial Prosecutors Office (PNF) and explained as follows.

“The fraud involves a foreign shareholder in a company listed in France temporarily transferring the shares he owns to a French banking institution, around the date the dividend is paid out,”

As it stands, it is believed that the raided banks actively facilitated the practice to allow clients a means of evading taxes.  Moving forward, the investigation may spread to banks situated around the world if found to be involved.

News of this investigation comes at a time when trust in traditional banks is already waning, not solely due to fraud, but as a result of poor management practices that have exposed the perils of counterparty risk resulting from a fractional reserve system.

Fraud is Not Crypto Specific

The situation involving the aforementioned banks serves well to highlight the fact that fraud is prevalent across most industries if you look closely enough.  It is nothing new, and has plagued financial markets since the dawn of time.

However, if regulators and mainstream media are to be trusted, recent actions would indicate that digital assets are the issue.  Fraud existed long before the rise of digital assets though, and remains prevalent to this day within Traditional Finance (TradFi).

In late 2022, 16 U.S. based financial firms were fined $1.8B for lapses and violations of federal laws.  In 2021 banks globally were fined $15B for a litany of issues including money-laundering, tax evasion, etc.

The sad truth of the matter is that whenever there is money to be made, there will be bad actors that exploit and manipulate industries, and the people of which they are comprised.

Much of the digital asset sector is littered with scams and fraud, there is no denying that.  It is important to recognize however that digital assets themselves are not the issue.  Fraud and manipulation will occur regardless of what system is in place.