One of the most wanted financial whistleblowers, the Frenchman Hervé Falciani, has chosen new unusual weapons to fight against money laundering and fraud, a cryptocurrency and the blockchain technology on which it is based.
This former HSBC systems engineer managed with his leaks to activate several investigations for tax evasion around the world, and now lives self-exiled in Spain working with a group of academics, especially mathematicians, and experts in Fintech to launch a cryptocurrency that Regulators can use.
His idea is to launch an electronic ‘ethical’ currency, called Tabu, that is traceable thanks to a certificate that shows its ‘clean’ origin. Fraudsters and those who do business in black often use these coins to hide the illicit origin of money.
“What happens with any innovation or any technology is that it can be used in a bad way or positively causing a social benefit,” Falciani told Reuters in an interview held in a neutral place in Madrid.
Falciani explains that blockchain – the technology used to verify transactions with cryptocurrencies and share it in a network – can add transparency to any electronic exchange, helping to fight against fraud.
The project is being developed by a non-profit platform called Tactical Whistleblowers that this Monegasque has founded in Spain. The group includes several academics from the Polytechnic University of Valencia, in eastern Spain.
Last year, almost a decade after the theft of the so-called ‘Falciani List’, a high court in Spain refused for the second time to extradite the informant to Switzerland, which he himself acknowledges helped to spread and generate interest in Tabu.
“If it were not for that, we would not have heard about the cryptocurrency project I was involved in,” says Falciani, who says he lives thanks to his work as a consultant.
Falciani has reserved five million tokens (each unit of a cryptocurrency), which values 2 million euros ready to be acquired by investors pending the approval of the Spanish securities regulator. In addition, it has achieved a financing of 1.3 million euros among collaborating star-ups, but the project still needs another two million euros to complete.
Falciani is preparing to launch another initiative that is based on blockchain technology and will facilitate the verification of invoices in bidding processes in public administrations, a sector in which extra costs and fraudulent schemes are generated in many countries.
“Technically and financially this opens the door to improving bidding systems. In public procurement we have a huge opportunity to save money, “he says of his new project called Aletetheia, a Greek term that means revealing the truth.
The system is inspired by other structures such as SWIFT, the bank reconciliation program by which financial institutions check data in transfers.
“False information is the basis of any fraud […] just as we fight against false news we can use the same technology applied to false invoices,” he adds.
The autonomous community of Aragón in Spain, will be one of the pioneers in the world in using blockchain technology for its public procurement system. Although Falciani has not been involved in this process, shows interest in using these systems that the European Commission has also asked to promote.
Falciani believes that banks will also benefit from the use of the blockchain when it comes to simplifying decision-making, such as granting loans. The computer scientist acknowledges that he has received offers from the financial sector but that for now he only intends to work as an occasional consultant.
He does not regret what has happened in these years, not even from the time he spent in prison awaiting extradition, an experience that he believes opened new perspectives for him.
“The prison is supposed to be a nightmare for anyone, but for me it was a means to an end […] Even there, I had the opportunity to learn things,” he says.