The same could be said for many financial regulators all over the world -- clubby relationships with financiers, vulnerable to lobbying, "looking the other way" when there are signs of problems, letting the big fish off the hook while coming down hard on small players, etc.

In some countries it's much worse, with outright fraud involving the regulators themselves.

p.s., Sorry any Delaware residents. You live in a very nice state.

[1] https://en.wikipedia.org/wiki/Panama_Papers

This state should be called the "land of trolls"

As to what the other states get you, I'm not sure.

Not a lot of money laundering coming through NL or SK

... what?

Think about if a regulator looks the other way, he is seen as incompetent - many times you'll not be punished for incompetence at work. But this benefits the corporate player and he can offer benefits to the regulator like private jet (for his family/friend use), maybe access to a resort where the regulator's family can stay during vacation or maybe an apartment in some posh locality where the regulator's kid can study abroad.

People are acting in their self interest.

You've salary and ethics Vs luxuries and loyality from the rich man who is unlikely to go bust.

Thing is you can choose to not coperate but that only increases the price and the rich man goes for your boss then you get in trouble as boss is cooperating with them and he may fire you.

I once dated a very rich and powerful lady in Asia and she could solve all problems with just 1 phone call - that was amazing, she new everyone everywhere it felt.

> https://mobile.twitter.com/DonutShorts/status/12736903626080...

Huh? I read the thread. It calls out a bunch of people who were involved; it doesn't discuss what happened at all.

[1] https://translate.google.com/translate?sl=auto&tl=en&u=https...

https://aboutus.ft.com/en-gb/announcements/ft-statement-on-w...

That's actually the explanation. 10 years ago I ran a small project and they were the only Payment Service Provider that agreed to work with us. At that time at least in Germany there were no Paypal and Stripe to directly process Credit Cards etc. for small websites. IIRC their fees - especially for refunds - were much higher than those of competitors. Refund rates are normally in the sub percentage but they would accept higher than usual refund rates without cancelling the account. It's easy to start a business in an area where there is a vacuum of competitors.

(FWIW I think cancelling the account with them to switch over to Paypal took almost 2 years...)

Huge number of chargebacks. A previous employer of mine had a subsidiary that handled premium rate SMS and phone call billing, a lot of which was adult services. You'd see a huge amount of contested charges, for reasons such as:

* Buyer's remorse (get drunk, wake up the next day, realise you spent $500 on porn)

* Unsupervised minor - your kid "borrows" your credit card for some online "research"

* Outright fraud - stolen cards, etc.

This isn't a case of a few errors and lack of a little due diligence.

That kind of stuff is pretty common though, Elon Musk has about 15 billion dollars, 100x that amount (!), of his Tesla stocks posted as collateral for personal loans: https://www.theverge.com/2020/5/8/21252487/elon-musk-persona...

And Deutsche Bank is a big player in this kind of business, remember their involvement with Trump?

"Wirecard's origins date back to 1999, when its Berlin-based predecessor InfoGenie was founded. Wirecard listed its shares on Frankfurt's stock exchange through a reverse merger with InfoGenie in 2005."

[1] https://www.ft.com/content/d080c3fc-c561-11e8-8670-c5353379f...

Not sure I get this. The news reports also seem to claim that E&Y rejected to sign the balance sheets. Or was that just after everything went haywire?

Also, given that there are days when tether issued 3bln dollars to prop bitcoin, I'm sure the owners have made a lot of money by manipulating other legitimate cryptocurrencies prices.

What does this mean?

Just a joke. It means that you can’t tell who lost their shirt til all the bubbles are drained from the pool, and we’re left with ourselves, each other, and our new shared reality.

Between Enron, S&L, Lehman, WorldCom, AIG, Wirecard, Madoff, VW, gold price fixing, 1MDB, and all the "lost" BTC stories - among so many others - it seems like a question that needs to be asked.

At one end is Lehman, which was incredibly over-leveraged and only slightly fraudulent ( https://www.accountancyage.com/2010/12/21/ey-sued-over-lehma... ), but set out to be a legit investment bank. AIG is in a roughly similar category. There was some fraud: https://www.sandiegouniontribune.com/sdut-gen-re-aig-trial-0... - but the collapse was due to leverage.

At the other end are Madoff and 1MDB, which were intentionally fraudulent from the beginning.

The "lost" BTC stories are just off in outer space; the bitcoin ecosystem doesn't acknowledge fraud or accounting control as a concept, because that goes against "code is law" and transaction irreversability.

Apart from that, the second half of your first sentence is exactly the question - is fraud endemic to this industry, and actually central to its operation?

The popular perception is that the industry is somehow fundamentally honest with a few bad-actor exceptions.

Considering how regularly fraud happens, how damaging it is, and how rarely it's flagged by auditors and regulators, I think it would be useful to question that view.

Or to invert the polarity - how many significant potential frauds have been prevented by auditors and regulators, or by paperwork theatre like KYC?

Are there any? If so, how do the numbers compare with the number of frauds that blow up into real financial and reputational damage?

That was the fault of Mt. Gox, not bitcoin. Also the fault of uneducated users, don't leave your bitcoin sitting at an exchange.

Saying Bitcoin is flawed because Mt. Gox got hacked, is like blaming the manufacturer of your car because it was stolen when you left it in parking garage with no attendant, and left the keys in the ignition with the window down.

There was no technological flaw with bitcoin itself, there was plenty of technical flaws with Mt. Gox web site.

But ask a BTC True Believer and they will talk about how inherently flawed money is with respect to this because of how people act, and yet BTC is not inherently flawed despite how people act.

Neither do banks. Transferred means transferred. They had to be regulated into KYC. I don't recall the reason, wether it was fraud or terrorism.

Interesting question to procrastinate with :) Apparently it was both, it started with measures to prevent money laundering by the mafia, with the Federal Deposit Insurance Act of 1950[0]. The current regulations are a result of 9/11 and came as part of the Patriot Act[1].

[0] = https://authenteq.com/the-evolution-of-kyc-part-2/

[1] = https://en.wikipedia.org/wiki/Know_your_customer#Laws_by_cou...

(In the UK a lot of bill payment stuff is done by direct debit, which has a better "guarantee" agreement on getting your money back)

I feel like if you're going to ask that question then focus on dishonest financiers and not every business that has broken the law.

You mainly hear about the latter kind, and finance is in particular an industry that's targeting them. When people want something (profit) out of nothing (little to no work carefully picking investments, instead just give your money to someone else), there's a lot of people willing to sell them "something" that's really "nothing".

The rats will cooperate if it lets them steal more.

I searched for the name of (IIRC) the third biggest Swiss bank on HN now. No stories ever, one comment, and that comment was basically a list of banks. That bank exists, though, it just isn't named when people talk about scandals.