Original Author: ShadoraJanuary 6, 2018
Part II: Why The Hell did Wargaming Buy A Stake In Hellenic Bank In Cyprus?
This topic is very complex and will be divided into two parts, Part II of IV will discuss what money laundering is and possible reasons why WG bought a bank in Cyprus. Part III of IV will discuss the present state and future of this bank and what the possible ramifications are for President Trump and the entire shitty island of Cyprus if they don’t get their f*cking act together.
As you know from Part I, Cyprus is the eastern version of the wild west. A lawless land where wealthy Russian businessmen and women can “clean” their money, and be free from the greedy hands of the Russian authorities. Cyprus is referred to as “Treasure Island, ” and no treasure would be safe without a bank to hide it in. Exhibit one, the Hellenic Bank of Cyprus.
You all must be wondering, what the hell does WG know about banking? They can’t even balance tanks in their flagship game World of Tanks, how the hell can they balance the books at a frigging bank. They created the D.W. 2 for God’s sake. For those of you who never had the displeasure of driving this shitbox, it would make you scratch your ass and sniff your fingers to wake up from the nightmare of just how shitty this shitbox is. It would then make you wonder who in their right mind would draw this up, test it, and give the go ahead to put this POS on the battlefield. Sorry, I got sidetracked, it happens sometimes, back to the story.
Again, why the hell does WG need a bank in Cyprus? To answer this question fully will take a few steps because there are several reasons why WG would want to get their hands on a bank in Cyprus. As we learned in Part I, Cyprus is an island nation with very lax regulations, no double taxation treaties with many nations (including the US), and a rancid reputation for being Russia’s place to “clean” dirty money.
What is money laundering?
Money laundering is way to legitimize money gotten from illegal activity or from people trying to avoid taxes, regulations or scrutiny. the money becomes “clean” when it is transferred around into banks and enters the financial system where it can then be transferred to other banks in other countries and look legitimate. In Russia, apparently there is a lot of dirty money needing to be cleaned. Enough so, that they need an entire nation on a tiny f*cking island in the middle of nowhere to do this dirty deed.
The graph on this page shows a good description of the process of how money is laundered:
OK, I hope we have some idea now what the purpose of laundering money is and why it is so important to get it into the banking system somewhere in the world, even on a tiny f*cking island in the middle of nowhere. You see, the weakest link of this entire process is the first bank that accepts the dirty money as being legitimate. After it is accepted into the banking system, this money could be used for anything anywhere in the world and seem as legit as the 200 or so imaginary tanks WG dreamed up and put into their game.
All banks are required to adhere to certain standards to decrease money laundering and terrorist activity. They are referred to as the “know your customers” (KYC) standards which include, customer acceptance policy, customer ID procedures, transaction monitoring, and risk management. Hellenic Bank apparently failed to do so and was fined 973,250 Euros by the country’s Central Bank in 2016.
What a shock, right? But, the fine seems like a very small slap on the wrist to appease the EU and US who have been cracking down on the way banks do business in Cyprus following their financial meltdown a few years ago. The rest of the world is still very critical of the Cyprus banking system and is looking to lower their rating which could possible affect Cyprus’ ability to remain viable as part of the worldwide banking system. What good would a bank in Cyprus be if banks in other countries won’t accept transactions from them? The entire country would collapse and a mass exodus would follow, which would include 12,000 businesses that don’t actually have a physical presence on the island, but use it as their business address for all of the great perks that “Treasure Island” has to offer. This mass exodus would be on the same scale as the NA server experienced during 2016-2017.
So, back to our original question. Why the hell did WG buy a stake in Hellenic Bank of Cyprus? WG currently owns a 24.8% stake in the bank, which is down from a 26.2% stake they owned in 2015, when they sold 50 million shares to an undisclosed buyer. Yes, undisclosed. They are currently the second largest owner of the bank.
There are many reasons to own a bank. Banks lend money. Banks give out mortgages Banks can clean money. There are a lot of people in countries like Russia looking to clean money. If you have the connections in those countries, you can make a fortune by doing nothing but cleaning their money and getting it out of the country where they don’t want it, into the country where they do want it. The requirement to be a Cypriot (citizen of Cyprus) is a 2 million Euros investment in Cyprus. Yes, as we saw in Part I, you can buy citizenship in Cyprus. This includes having a residence with a value of at least 500,000 Euros included in that 2 million Euros. Once you are a citizen of Cyprus, you enjoy all of the tax benefits and access to business markets, many of which Russia does not. I wonder if a bank holding a mortgage on a residence in Cyprus can offer up a package to anyone wanting to be a Cypriot without actually having to own the house. It could be a yearly fee without all that money and investment up front. I wonder where those undisclosed 50 million shares went? I wonder if that is the other 1.5 million Euro investment requirement for quite a lot of foreigners. It kinda makes you wonder doesn’t it? If you have the connections there is a great value in owning the f*cking bank. You are the gatekeeper and with your political ties, you are almost invisible to scrutiny.
The bottom line is owning a bank with public shares can also take the burden off when you are losing money by just having another stock offering, or getting another bail out. The prestige of being the owner of a bank in Cyprus to the average Russian businessman would be the same as being a Star Wars fan and meeting Daisy Ridley at a party and her asking for your number. Own the bank, control the money, period. You really have to hand it to them. They know what they are doing, I give them credit.
There really isn’t much risk to owning your own bank, or is there? Apparently the Hellenic Bank of Cyprus isn’t doing so hot lately. They are going through some changes which we will discuss in more detail in Part III of IV: No One Told Me This Bank Could Tank.
Disclaimer: My name is John Smith but you can call me Bubba. Everything I have said and will say in this series is only my opinion and is for entertainment purposes only. My current location is on a small boat docked next to a small island (not Cyprus) in a yet undiscovered island chain which lies in a large body of water.