One of the biggest problems with trusting a third party is the abuse of trust. Bank of America has been doing terrible things to long-standing customers. A recent report from CBS Sacramento details how Bank of America has been seizing the contents from safety deposit boxes and denying any wrongdoing whatsoever.
For a 40 year Bank of America employee who had trusted her former employer, it was a shock to find that not only was her safety deposit gone, there were no answers at all. From CBS Sacramento;
“Susan Nomi says when she went to open her Bank of America safe deposit box of 16 years, the entire box was gone.
That’s where she kept her family’s jewelry and her dad’s coin collection.
“I was in shock; I was just like what happened to my box,” said Nomi.
She says Bank of America can’t explain where her valuables went.
“They don’t have an answer. They don’t have an answer. They say thanks for letting us know,” she says.”
Susan Nomi isn’t alone in being mistreated by the big banks. One of the most prominent arguments that have been made by central banks against cryptocurrency is the lack of a trusted third party, but as this example illustrates, the big banks don’t seem to deserve the trust of anyone.
Bank of America isn’t alone
The Wells Fargo scandal just keeps getting deeper. The megabank has already been pinned with using high levels of pressure from management to coerce bank employees into creating numerous false accounts for customers, who were then charged fees for services that they never wanted. Not only is this fraud on a massive scale, it undermines the argument that banks should be trusted by anyone.
Central banks and the Bank for International Settlement (BIS) have been harsh in their view of cryptos. They seem to overlook the blatant abuse of power that exists in the existing financial system. There is little recourse for customers because the megabanks have so many lawyers and regulators on their side.
The robo-signing scandal that came out in the wake of the mortgage crisis is yet another example of how major banks are treated as above the law. While many did have to pay huge fines, people who committed fraud on an international scale never saw any criminal prosecution. The massive loans that Bank of America, among many others, made during the housing boom were a direct cause of the 2008 crisis.
Making bad loans to pass off to investors is apparently okay, as is seizing the personal property of clients that trust banks. All of this makes the credibility of trusted third parties look pretty thin, which isn’t great for their long-term survival.
Really, no Bitcoin ETF?
The decision of the SEC in the US last week to shoot down the Winklevoss twin’s Bitcoin ETF is yet another example of how corrupt the established financial system appears from the outside. The idea that subprime mortgages and auto-loans can still be manufactured into bonds and traded, and that people can’t buy into a Bitcoin ETF is patently absurd. Subprime bonds literally brought the global financial system to the brink of collapse a decade ago, and still, they are 100% legal.
When the SEC decides to prohibit the trade in a digital asset that has no systemic risk associated with it, it is time to start asking some serious questions. The first one that comes to mind is-Does the central bank-led financial system really think that people are going to keep playing a rigged game forever, especially when cryptocurrency offers a viable alternative?
Nicholas Say was born in Ann Arbor, Michigan. He has traveled extensively, lived in Uruguay for many years, and currently resides in the Far East. His writing can be found all over the web, with special emphasis placed on realistic development, and the next generation of human technology.