‘Rekt’ is a slang term for ‘wrecked’. It started out among gamers, but has quickly spread to many places online. Including cryptocurrency forums. Why is that relevant today? Because Commonwealth Bank may be about to get rekt. And they could drag others down with them.
More than 50,000 breaches of anti-money laundering (AML) regulations. That was the number thrown at Commonwealth Bank [ASX:CBA] by AUSTRAC. The reality is 50,000, 30,000, 1,000 or just 10 breaches, it would still indicate a big problem.
Even just one non-reporting of an AML breach is serious. And as we should expect the regulator has come down hard on the CBA.
We don’t know yet exactly what the penalty will be for the bank. There’s a good chance it will run into the tens of millions or hundreds of millions in fines. It may even cross $1 billion.
And the bank itself? Well, executive bonuses have been slashed. There’s a possibility the board will spill. And CEO Ian Narev is ‘retiring’ at the end of the next fiscal year.
It’s hard times for the CBA. But they brought it on themselves really. And they will pay, in terms of both money and reputation.
But now we all pay too. And not in the way you might think.
Regulators gonna regulate
The inability to monitor AML laws is a problem. And it’s a problem the whole country faces.
Two years ago the Financial Action Taskforce found issues with Australia’s approach to anti-money laundering.
The report said that the banks and authorities had a ‘good understanding’ of the risk. But the report also said there’s too much focus on predicate crime (illicit drugs, fraud and tax evasion). There should be more focus on money laundering itself.
And while the awareness and compliance is there, clearly it’s not being put into practice. Somewhere along the line the system is failing — or the whole line itself is failing.
And now the regulators are on the case. Yesterday the Justice Minister, Michael Keenan, said a new Bill was coming to parliament.
This bill will strengthen money-laundering laws in Australia. And it’s thanks to ‘serious and systemic’ breaches by the CBA.
Speaking about the upcoming changes to the law, Keenan said,
‘The threat of serious financial crime is constantly evolving, as new technologies emerge and criminals seek to nefariously exploit them. These measures ensure there is nowhere for criminals to hide.’
Those are strong words from the government. But the devil is in the detail.
By ‘new technologies’ they mean cryptocurrency. Good one, CBA, you’ve wrecked it for everyone.
Regulating the unregulatable
The government has been looking for a way to regulate cryptocurrency for a while. In June, opposition leader Bill Shorten said,
‘There are two things we simply do not know enough about to deal with properly — I refer to the use of the digital currency bitcoin and the use of the dark web, a network of untraceable online activities and hidden websites, allowing those who wish to stay in the shadows to remain hidden,
‘…we need to track and target terrorists as they seek to hide and obscure their financial dealings through electronic currencies like bitcoin.’
And in yesterday’s speech, Keenan also went on to say,
‘Stopping the movement of money to criminals and terrorists is a vital part of our national security defenses and we expect regulated businesses in Australia to comply with our comprehensive regime.’
This tougher stance is not unexpected. But it’s not going to be as easy as they might think.
The government knows they’ve got a problem. There’s an existential threat to their powerbase. And it’s coming from decentralised, distributed networks in the form of cryptocurrency and the blockchain.
Become a leader of the future
The power of cryptocurrency is huge. We should know. We’ve been researching this area for over seven years now. We know the cryptocurrency world inside out like no other investment advisor in the country.
That’s why we put together our cryptocurrency investment service, Sam Volkering’s Secret Crypto Network. It’s to help everyday Aussies like you find your way through this new, exciting and often confusing and risky new investment opportunity.
We’ve said for years that cryptocurrencies will create an entirely new financial system. They will steal power from central authority like the government. They will give this power back to the people. And that’s exactly what’s happening.
Even tech mogul John McAfee said recently,
‘Distributed, decentralized systems have an inherent power that literally obsoletes centralized systems.
‘The reality if this new world [of cryptocurrency] is what it is. Those who understand will be the leaders of this new world.’
The government wants to control it. But they can’t. It has no borders. There is no central authority. Rule with an iron fist, and cryptocurrency communities will simply go elsewhere.
Trying to regulate cryptocurrency is like trying to catch a single bee in a swarm…on a 40-degree day…with a pair of chopsticks…made of ice.
They will try, but they will fail. And the shift of power will continue through decentralised networks.
The world is changing. And it’s driven by blockchain and cryptocurrencies. Like McAfee said, if you can understand it you’ll be one of the leaders of the new world.
Let us ask you two final questions. Do you understand cryptocurrencies? If no, then do you want to? If your answer is yes, then join us at Secret Crypto Network and become a leader of the future.
Editor, Australian Small-Cap Investigator