ECB Member Detained in Anti-Corruption Probe (But Banks Continue to Finger Bitcoin as the Problem)

A member of the European Central Bank’s (ECB) governing board has been detained in an anti-corruption probe.

ECB Member Detained in Anti-Corruption Probe

Ilmars Rimsevics, who heads the Bank of Latvia, is suspected of demanding bribes amounting to at least 100,000 euros. He was detained last weekend as part of an anti-corruption investigation launched by the country’s Corruption Prevention and Combating Bureau. Authorities also raided his home and office, according to a report from Reuters.

The arrest is notable given that since Latvia is a member of the eurozone, Rimsevics holds a seat on the ECB governing council. In fact, he has served longer on the council than any other central banking chief.

Rimsevics’ detention follows an order from the US Treasury, which last week instructed domestic banks not to transact with Latvia banking giant ABLV, claiming that the firm has “institutionalized money laundering” under Rimsevics’ watch.

Rimsevics, meanwhile, reportedly plans to continue his work at the bank, despite calls from legislators that he be suspended during the investigation.

‘Institutionalized Money Laundering’ or Not, Banks Continue to Finger Bitcoin as the Problem

The ECB, incidentally, has expressed open hostility toward Bitcoin, which several members have lambasted as a fraudulent asset or money laundering scheme.

While ECB President Mario Draghi has frequently stated that the organization does not have the authority to regulate cryptocurrency, individual members have been less measured in their comments on Bitcoin.

Ewald Nowotny, who leads Austria’s central bank and also sits on the ECB governing council, suggested last year that regulators should follow China’s example and pursue a broad crackdown on cryptocurrency trading.

“We’re asking ourselves if legislators or central banks should intervene, as happened in China where they banned (the use of cryptocurrencies) because they consider them fraudulent,” he said.

More recently, ECB executive board member Yves Mersch said that the board’s views on the nascent technology were in line with those of noted Bitcoin basher Agustin Carstens, the general manager of the Bank for International Settlements (BIS).

Last month, Carstens excoriated Bitcoin in a recent speech, arguing that there is a “strong case” for central bankers to “clam[p] down” on the cryptocurrency, whose only use case is “illicit or illegal transactions.”

“Novel technology is not the same as better technology or better economics,” Carstens added. “That is clearly the case with Bitcoin: while perhaps intended as an alternative payment system with no government involvement, it has become a combination of a bubble, a Ponzi scheme and an environmental disaster.”

Perhaps the central bankers should remove the planks in their own eyes before they presume to subject Bitcoin to the same treatment.

Featured image from Shutterstock.