B2B Payments

Money Laundering Probe Eyes $150B In Transactions

Denmark’s largest bank is investigating $150 billion in transactions to find out if companies with ties to Russia used it to launder money.

According to The Wall Street Journal, sources said that the funds flowed through a tiny branch of Danske Bank in Estonia between 2007 and 2015 and involved money from Russia, Azerbaijan and Moldova — former Soviet Union states. “It is very serious. If you look at this scandal, you can compare it to the most serious money laundering scandals in Europe. It’s a disaster for the bank,” said Jakob Dedenroth Bernhoft, a Danish expert on money laundering.

Danske Bank’s board of directors is looking into the transactions. One source said the money would have stayed in the branch for only a short time so it might not show up in deposit statistics.

“Any conclusions should be drawn on the basis of verified facts and not fragmented pieces of information taken out of context,” said Danske Bank Chairman Ole Andersen in a statement. “As we have previously communicated, it is clear that the issues related to the portfolio were bigger than we had previously anticipated.”

The bank said the results of its probe are being finalized. Its shares fell as much as 7 percent on Friday (Sept. 7) as a result of the news. The Estonian branch is the subject of criminal investigations in Denmark and Estonia, and has lost some of its customers due to the scandal. In July, it was reported that the bank had lost client Unity Technologies, a video game startup that is valued at $2.6 billion.

Unity’s David Helgason noted that while it’s not going to be easy to switch to another bank, he wanted to take a stance because the bank is caught up in a money laundering scandal that is hurting its reputation. “Management should not just ensure that their business follows the law (as you apparently have done), but also make sure their actions can withstand the light of day. And there you have failed so seriously that we your customers need to draw the consequences and move on,” he wrote in an open letter on Facebook.

In addition, Danske is facing more pressure from the government in Denmark, which said it could confiscate any profits made, as well as investor concerns that the U.S. may join Denmark, Estonia and France in investigating the scandal.



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