Weekly Global News Wrap: Tether execs face criminal probe for bank fraud; Credit Suisse taps Goldman Sachs partner as new chief risk officer
And PayPal to research US transactions that fund hate groups and extremists.
A US probe into Tether is homing in on whether executives behind the digital token committed bank fraud, a potential criminal case that would have broad implications for the cryptocurrency market.
Tether’s pivotal role in the crypto ecosystem is now well known because the token is widely used to trade bitcoin. But the Justice Department investigation is focused on conduct that occurred years ago, when Tether was in its more nascent stages.
Federal prosecutors are scrutinizing whether Tether concealed from banks that transactions were linked to crypto, said three people with direct knowledge of the matter who asked not to be named because the probe is confidential.
Credit Suisse has appointed Goldman Sachs partner David Wildermuth as its new chief risk officer.
The Zurich-based bank has been cutting risk after its prime brokerage business lost billions from the collapse of family office Archegos, and as its asset management division scrambles to return some $10b of client investments linked to insolvent supply chain finance firm Greensill.
Those scandals have prompted a swathe of sackings, executive changes and regulatory investigations, as well as a planned strategic overhaul which Chairman Antonio Horta-Osorio has said is to make risk and cultural change a top priority. Former Chief Risk and Compliance Officer Lara Warner was one of the high-level casualties.
PayPal Holdings is partnering with non-profit organisation the Anti-Defamation League to investigate how extremist and hate movements in the United States take advantage of financial platforms to fund their criminal activities.
The initiative will focus on uncovering and disrupting the financial flows supporting white supremacist and anti-government organizations.
The information collected through the initiatives will be shared with other firms in the financial industry, law enforcement and policymakers, PayPal said.
Photo courtesy of Drawkit Illustrations (Unsplash)