The case of NatWest Bank, and many others, is standing proof that traditional fiat institutions and even banks have been found to promote more money laundering transactions than bitcoin, as opposed to the argument raised by several bitcoin critics.
The major British retail and commercial bank has recently pleaded guilty to charges of failing to comply with anti-money laundering compliance and facilitating the laundering of a whopping $554 million by its client.
The Alleged Money Laundering Case
On Thursday, during a hearing in Westminster Magistrates’ Court, NatWest Bank pleaded guilty to three counts of failing to monitor the accounts of its UK incorporated customer.
The UK’s Financial Conduct Authority (FCA) alleged that NatWest Bank had failed to properly monitor the suspicious activities of its client, Fowler Oldfield, a jewelry wholesaler which deposited £365 million (over $500 million) within the space of five years.
The gold dealer had become a NatWest Bank client earlier in 2011 and its annual turnover was projected to be £15 million ( $20.5 million), with the agreement that NatWest would not handle cash.
However, during the space of five years, the gold dealer had paid about £264 million in cash into its accounts and was even paying £1.8 million every day at one point.
Fast forward to 2016, Fowler Oldfield was shut down following a police investigation into a “sophisticated” money laundering operation in which it had allegedly been involved.
Clare Montgomery QC, the lawyer acting for the FCA stated,
“The facts of the case are complex, the likely sentence is a very large fine.”
After pleading guilty to the charges, NatWest Bank is scheduled to face sentencing in December, with a fine of up to £340 million ($462.2 million), although this will be determined by the judge.
NatWest CEO Apologises
Following the trial, NatWest Bank CEO, Alison Rose promptly tendered an apology on behalf of the bank.
She said in a statement,
“We deeply regret that NatWest failed to adequately monitor and therefore prevent money laundering. NatWest has a vital part to play in detecting and preventing financial crime and we take extremely seriously our responsibility.”
On its part, the FCA has confirmed that it will not be taking any legal action against current and former NatWest employees.
NatWest Bank also said in a statement that it would make a provision for the fine in its Q3 results, adding that it has already spent over £700 million to upgrade its money-laundering prevention systems.
Bitcoin critics often tend to ignore that although the digital currency is used by some bad players just the same way they use fiat currencies to launder money, bitcoin processes thousands of genuine transactions daily, and that should be a plus.
Just last month, a Maltese bank, not bitcoin, was charged for money laundering.