The European Commission has fined five banks, including the anti-Bitcoin JP Morgan, a total of over €1 billion for currency rigging. Traders clubbed together into ‘cartels’ to manipulate the foreign exchange market between 2007 and 2013.
You Can Trust The Big Banks… To Help Themselves
The “Banana Split” cartel involved traders from Barclays, RBS, Citigroup, and JP Morgan, which face penalties of €811 million in total. Traders from Barclays and RBS traders, along with MUFG, were also in the “Essex Express” cartel, and received €259 million in fines.
Swiss bank, UBS, was also involved but avoided financial penalties for
grassing alerting the authorities to the cartel’s existence.
The traders used online chatrooms to exchange trading plans and co-ordinate strategies. This enabled them to “make informed market decisions on whether to sell or buy the currencies they had in their portfolios and when.”
Competition Commissioner, Margrethe Vestager, said the banks had “undermined the integrity of the sector at the expense of the European economy and consumers.”
In January, JPMorgan stated that Bitcoin would only be valuable in a dystopian environement after its CEO called it a ‘fraud.’
And It’s Hardly A One Off
But this is just the latest in a seemingly endless parade of fines imposed on the big banks for misconduct. From forex manipulation to money laundering, via straight-up fraud; if there’s money in it, a minor thing like illegality won’t stop the banks getting involved.
RBS has already said that its €249 million share of the fines is “fully covered by existing provisions.” Despite talk about strengthening procedures and implementing change, it seem that the banks have little incentive to alter their behaviour. Fines, it would seem, are just an occupational hazard.
However, on this occasion, the Commission’s judgement could be an open invitation for impacted parties to sue the banks. According to lawyer, Lambros Kilaniotis:
If they haven’t already, any party involved in forex trading, such as institutional investors, pension funds and large corporates, should now be reviewing what losses they have incurred
The Same Big Banks Who Routinely Decry Bitcoin
Yes, the level of hypocrisy the big banks display is in some ways quite impressive. Whilst regularly bashing bitcoin as a tool for market manipulation, fraud, and money-laundering, they keep getting caught doing exactly what they accuse Bitcoin of enabling.
Should we ask the post office what they think about email? Or the taxi driver about Uber? No? Then perhaps it’s time to stop asking bankers what they think about bitcoin and just let them pay their slap-on-the-wrist fines.