Banks fraud, deceit, and theft are a lot higher than Cryptocurrency. Read how.. (advanced plan)

Big Bank Bamboozles

At the beginning of 2018, investment banking firm Keefe, Bruyette & Woods released a list showing the top 11 biggest banks in the U.S. have paid an amazing $243 billion in fines since 2008. Bank of America leads the pack with $76 billion in fines, while JP Morgan Chase had $44 billion, and Citigroup, Deutsche Bank, Wells Fargo, and RBS each had between $10 and $20 billion a piece.

Of course, these fines almost certainly represent just a small portion of the actual fraud committed by these big-name banking enterprises. In 2013, I wrote an article for Jim Cramer’s The Street publication detailing a $14 million fine against a company for participated in a $50 billion force-placed insurance racket that’s still going on today. That fine represents about 0.03% of the total fraudulent revenue generated from the scam.

This is standard in the financial world. For example, the New York Department of Financial Services fined British Bank Standard Chartered $340 million for allegedly laundering $250 billion of Iranian money (0.14% of illegal funds).

By being fined less than 1% of ill-gotten gains, banks are almost incentivized to commit financial fraud. Rarely does anyone end up in prison, and the profits are worth the crimes. The $243 billion in fines potentially represents up to $24 trillion in fraudulent activity, and that’s just the financial crimes that have been brought to the attention of regulators from 2008-2018.

In short, the legacy banking industry is full of fraud, deceit, and theft. There’s no way the cryptocurrency industry can be worse, right? Let’s find out.

Cryptocurrency Can’t Compete

Business Insider reports crypto scams and hacks totaled $670 million in the first quarter of 2018 alone. (Although recent estimates have been proven by Crypto Briefing to be built on fallacious research.) But let’s go with them for now. estimates the total lost to cryptocurrency fraud is $9 million a day, or approximately $810 million for the quarter. It even estimates the total could actually be closer to $23 million per day. That equates to $2.68 to $8.395 billion that could be lost to cryptocurrency fraud in 2018.

Over the course of a decade, that would equate to between $26.8 billion and $83.95 billion in losses. It sounds like a lot, but not when compared to the $243 billion in fines the big banks paid over the past decade. And we’re comparing apples to oranges here, because $83.95 billion is the total amount of actual financial theft that occurred. The number we’d really need to compare it to is the $24 trillion in fraudulent activity that I’m hypothesizing the banks are responsible for.

This isn’t even accounting for bank robberies (like the $1 billion stolen by hackers in 2015) or the $16 billion in identity fraud committed against traditional banking customers every year. Just this year 90,000 customers had their personal data stolen via two of Canada’s largest banks.

Cryptocurrency scams are nowhere near as large as banking scams (although they are certainly getting plenty of publicity from the banking sector). In fact, the top 5 crypto scams of all time don’t even total $1 billion. Bernie Madoff alone stole $20 billion while rotating another $45 billion in his Ponzi scheme. That’s more than the net worth of the top 10 richest people in cryptocurrency combined.



Brian Penny is a former Business Analyst and Operations Manager at Bank of America turned whistleblower and freelance writer. In addition to Moving Water Trading, you can find his work focusing on financial regulations on Fast Company, Forbes, Huffington Post, and his blog, Thought for Your Penny.