Hot on the heels of my recent op-ed in the The Star, in which I voiced concerns over the possibility that Canada was becoming one of the preferred locations to launder criminal assets, another breaking story adds further gravitas to my warnings.
Quebec’s finance minister has recently ordered an external and independent audit of the province’s casinos, after news channel TVA’s investigative unit found Mafia leaders had received access to luxury perks through the Montreal Casino, including tickets to shows, meals and free hotel rooms.
Minister Eric Girard said he wants a deeper look into how the casinos operate, especially when it comes to loyalty programs. Casinos in the province are run by Loto-Quebec, a provincial Crown corporation.
The Quebec plan is to enlist the assistance of an independent auditor to go over casino records, to investigate potential money laundering and criminal activity. It will look into loyalty programs, to ensure they haven’t been rewarding those who receive cash from illegal activity.
One alleged Mafioso was listed among the top 10 players at the Montreal Casino in 2019, TVA claimed.
Loto-Quebec has denied any wrongdoing, insisting it is has strict regulatory procedures in place that meet with the province’s legal requirements, including anti-money laundering provisions.
If there is any substance to these allegations, then this is another blow to the Canadian regulatory community. It is now becoming apparent that those who are charged with protecting our country’s financial systems are fighting with one hand tied behind their backs.
Canada’s “snow washing” money laundering problem — the process of making a company as clean as the “driven snow in the Great White North,” often by laundering funds through Canadian real estate — appears to be worse than I first thought.
It is time for the government to address an issue that is damaging the international reputation of Canada. Make no mistake, until we have this problem under control, some overseas investors will shy away from capitalizing projects within our shores, ventures that we may lose to our international rivals.
Snow washing is clearly no longer an individual state issue, it is one that needs to be addressed by the Canadian government.
There is no substitute for hands-on experience. Anti-money laundering and counter-corruption investigators, steeped in the practicalities of preventing money laundering, should be called on to assist this process. I can’t help feeling that the federal government may be missing a trick by not consulting with them.
It may well be that if the government was to seek the opinion of those of us who are practicing in what is a highly specialized field, then the regulatory systems (that are clearly failing), like the laws, will become fit for purpose.
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Martin Kenney is managing partner of Martin Kenney & Co., Solicitors, a specialist investigative and asset recovery practice located in the British Virgin Islands with a focus on multi-jurisdictional fraud and grand corruption cases.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
