Several financial regulators have chosen not to back cryptocurrencies as they believe most trading platforms engage in market manipulation and insider trading.
While few exchanges have been guilty of the illicit act, financial regulators have made it look like it is impossible for banks to be involved in market manipulation due to adequate regulation in place.
Contrary to the opinion of the regulators, Sky News reports today that five popular U.K.-based banks have been slammed with a combined €344m ($390 million) fine by the EU commission, for rigging the prices of the foreign exchange spot trading market.
The involved banks Barclays, UBS, Credit Suisse, HSBC, and NatWest ran a FOREX price-fixing cartel via a chatroom dubbed the Sterling Lads.
Per the report, HSBC received the highest fine of €228.6 million ($259.2 million), while Barclays, NatWest, and Credit Suisse were fined €54.3 million ($61.5 million), €32.5 million ($36.8 million), and €83 million ($94.1 million), respectively.
All banks except Credit Suisse admitted to having engaged in the act in return for a reduction in the penalty.
The Shady Practice
The report stated that UBS notified the commission about the illicit activities and as a result, the bank avoided a €94 million ($106.5) fine.
Notably, the banks engaged the services of some traders who shared sensitive information and trading plans that helped them to make important decisions about the currencies to buy and sell in the chat group.
The commission noted that the banks focussed on G10 currencies, such as the Australian Dollar (AUD), the USD, GBP, EUR, Japanese Yen, etc.
Commenting on the development, Margrethe Vestager, the Commission’s competition chief, said the decision to fine the banks would send a warning to other financial institutions within its regulatory purview that it was committed to promoting a competitive financial system, adding:
“Foreign exchange spot trading activities are one of the largest financial markets in the world. The collusive behavior of the five banks undermined the integrity of the financial sector at the expense of the European economy and consumers.”
NatWest Bank Involved in Money Laundering
Meanwhile, this is not the first time NatWest will be slammed with a fine for indulging in illegal activities.
In October, the bank, which was formerly known as RBS, pleaded guilty to $554 million money laundering charges.