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.