It is no secret that central banks have a particular sense of dislike for cryptocurrencies, with almost all of them seeing them as a means for money laundering and an instrument to supplement illicit activities.
Banking Chiefs from the Bank of International Settlements to the Central Bank of Austria have all expressed their concern about this new financial phenomenon and have asked for stricter regulations or a complete ban on them, with the general manager from the Bank of International Settlements, Agustin Carstens, defining cryptocurrencies as “a combination of a bubble, a Ponzi scheme and an environmental disaster”.
Which is why, it held great significance when one of the very members of the European Central Bank (ECB), the central bank for the Euro which also constitutes monetary policy for the European Union (EU), was detained for asking for a bribe – many details of which were not released by the authorities.
Central bank governor released after questioning
The Latvian authorities detained its central bank governor, Ilmars Rimsevics, on account of soliciting a bribe of a 100,000 Euro. Rimsevics was arrested on Saturday, was questioned overnight while the authorities checked his office and belongings, and was then released on Sunday. The incident was explained by Latvia’s anti-corruption bureau.
However, Rimsevics denied the allegations “categorically” and continued to serve his position as governor of Latvia’s central bank. He has also been on the ECB to represent Latvia ever since the country joined the EU in 2014.
After news broke of the bribery allegations, Latvian officials, such as the country’s finance minister, Dana Reizniece-Ozola, stated that Rimsevics needs to step down “at least for the time of the investigation.”
Whereas, the Latvian prime minister, Maris Kucinskis, stated that he does not think “a governor of the Bank of Latvia detained over such a serious accusation could work.”
However, Rimsevics has not made any statement about stepping down from his post or about his plans to do so shortly.
Not the first such news from Latvia in recent times
It is prudent to mention that the U.S. recently accused Latvia’s ABLV Bank of money laundering, going as far as to say that the ABLV “had institutionalized money laundering as a pillar of the bank’s business practices.”
The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) accused ABLV of helping the breach of sanctions on North Korea.
However, the ABLV denied all allegations, with its deputy CEO Vadims Reinfelds mentioning that there had been “no violations of sanctions.”
The cases are not linked, authorities say
While it sounds probable, authorities from Latvia confirmed that the cases were not linked, and Rimsevic was only arrested on charges of bribery.
That being said, this could serve as a reminder to central banks which look down upon cryptocurrencies for allegedly illicit practices, that financial misconducts can happen even at the highest level with institutions and individuals associated with central banks themselves.
Since this is a developing story, updates will most likely come in within the next few days.