UK Banks Fined $66 Billion For Insurance Fraud; Bitcoin Still Bad?
The arguments as to why bitcoin is superior to the banking system are pretty clear cut to anyone that has used it. A decade ago BTC was conceived to cut out the fatcat middlemen and allow people to transact between themselves. We are not quite there yet, but flaws in the way banks work and grab their profits are mounting up.
Big Bank Fines Accumulating
Aside from the simple premise that bitcoin is faster and cheaper to send than an equivalent bank transfer, there are a number of other aspects in the crypto asset’s favor. Regulators, especially from the US, constantly harp on about money laundering and terrorist financing but they should really start looking closer to home than bashing bitcoin at every opportunity.
The world’s top banks have been fined in excess of $300 billion over the past decade for appalling and unprofessional behavior. That epic figure is more than the entire crypto market capitalization, yet still, regulators fret about a bit of bitcoin.
According to the figures, those fines are for a range of nefarious offenses including mortgage abuses, tax violations, insider trading, AML discrepancies, toxic securities, interest rate manipulation, and consumer protection violations.
According to Electric Capital co-founder, Avichal Garg, who documented the shocking findings, the UK fined banks $66 billion just this week.
1/ A large institutional investor asked me why people will trust Bitcoin over banks.
I showed the following data: The big banks have been fined upwards of $300B in the last decade for all sorts of appalling behavior.
US-only violation tracker:https://t.co/U1CayCoWFN
— Avichal Garg (Electric Capital) ⚡ (@avichal) September 11, 2019
The costliest scandal in UK financial history is coming to a head this week as the payment protection insurance debacle winds down. Banks and financial institutions aggressively sold this ‘protection’ with the intention of covering missed debt repayments. But as Dominic Lindley, policy director at New City Agenda, a London-based financial services think tank, pointed out.
“Someone within the banks must have known that not only was the product expensive, it was so ridiculously expensive that even if a customer made a full claim, it would barely cover the cost of the insurance,”
In one instance the commission paid by the bank to its staff for the sale of PPI was 87% of the premium and profits were so large that firms were prepared to risk a fine for mis-selling.
Garg continued with his banking expose adding that earlier this year Barclays, Citigroup, J.P. Morgan, MUFG and Royal Bank of Scotland were fined $1.2 billion for rigging the spot foreign exchange market for 11 currencies.
Trust Bitcoin, Not Banks
The list goes on and the banks have clearly put profits above all else, including their clients’ funds. The trust in banks is clearly in decline and disruptive technology such as bitcoin could be the solution since it is trustless. Garg concluded;
“Banks as organizations are dysfunctional. Instead of creating value first and monetizing later, they now exist only to make money — through any means necessary. Thus few people trust banks,”
Would you trust the banks more than the bitcoin network? Add your thoughts below.
Images via Shutterstock, Twitter: @avichal