Bitcoin: 5 major banks raided by French authorities over $100 billion fraud – Is it time to back crypto and buy BTC?

  • French authorities raid four local and one international bank in Paris and its surroundings.
  • It is reported that Societe Generale, BNP Paribas, Exane, Natixis, and HSBC are currently under investigation.

The French authorities have raided five major banks within Paris and surrounding areas in an investigation involving $100 billion. According to a spokesperson for France’s Financial Prosecutors Office (PNF), four local banks and one International bank were affected by the raid. The French and German governments are engaging in further investigations to probe other financial institutions for potential money laundering.

The names of banks listed to be under investigation are Societe Generale, BNP Paribas, Exane, Natixis, and HSBC. According to reports, the banks engaged in complex legal frameworks to assist wealthy customers to avoid some tax liabilities for dividends. It is reported that the investigation goes back to December 2021.

The ongoing operations, which have required several months of preparation, are being carried out by 16 investigating judges and over 150 investigation agents.

This comes soon after the collapse of Silicon Valley Bank and the failure of Credit Suisse, First Republic Bank, Signature Bank, Silvergate Bank, and others.

Rodney Ramcharan links banks collapse to gross mismanagement

The banking sector has seen the collapse of several major banks and other distressed ones saved by emergency mergers. According to José Manuel Campa, Chairperson of the European Banking Authority (EBA), the banking sector remains very vulnerable to further disruption. Peter Schiff, CEO of Euro Pacific Asset Management has likened this to the 2008 financial crisis and expects it to be worse than the great recession.

Rodney Ramcharan, a professor of finance and business economics at USC Marshall believes that gross mismanagement laid the foundation for the financial crisis.

Had some of these financial regulations been in place, SVB would not have been allowed to use so many uninsured deposits to fund its activities. But in our democracy where money shapes politics, banks like SVB were able to persuade Congress and the Trump administration to roll back these rules. With Dodd-Frank eviscerated, SVB and other smaller banks quickly expanded amid an environment of low-interest rates. They borrowed cheaply and invested in higher-yielding long-term bonds. They took on a lot of risks, and once rates rose, that risk came home to roost.

How will the banking sector crisis affect crypto?

It is expected that the banking crisis could make crypto a reliable alternative for depositors since any bank can take a hit at this moment. Analysts have observed that Silvergate and Signature served crypto companies with Silicon Valley Bank having several crypto startups and venture capitalists as clients. For this reason, startups may struggle to get lending services, and this may also affect crypto liquidity in the short term. However, it is expected that this could be an opportunity for innovation challenger banks to rise and replace the collapsed ones. In the long term, analysts expect banks to be more cautious and provide regulators with the opportunity to offer more clarity in regulations to prevent future events. 

Generally, the crypto market could be the possible destination for some of these customers when trust in traditional financial institutions is broken. 


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