Norway’s sovereign fund, the largest in the world, will closely monitor crypto companies and gambling operators for possible ethical breaches.
The investigation, led by the fund’s Council on Ethics, as reported by Reuters, will focus on ensuring compliance with ethical standards. Companies that do not comply with the guidelines could face penalties.
The Norwegian fund, largest across the globe with assets totaling $1.8 trillion, has stakes in about 8,700 companies across the globe and is the owner of 1.5 percent of all listed shares. It operates under a strict ethical framework.
Council on Ethics regularly screens companies within its portfolio to ensure they comply with ethical standards and maintain responsible practices. Any company not ensuring compliance could face exclusion or Council recommending placement on a public watchlist.
Agenda for 2025
The Council will prioritise reviewing investigations into companies dealing in crypto and gambling operators as part of its agenda for 2025. This comes as these sectors carry significant money laundering risks.
The fund holds stakes in these sectors, with a 0.83 percent stake in Coinbase worth $453 million. A 2.13 percent stake in Flutter Entertainment valued at $691 million and a 0.87 percent stake in MGM Resorts amounting to $121 million.
These investigations will address concerns over ethical compliance and societal impact of these industries. The fund will ask companies under scrutiny to amend their practices or engage with it directly to resolve concerns.
The initiative aligns with Norway’s broader commitment towards sustainability and ethical governance among many key sectors. Currently, the country has a state-controlled gambling monopoly by two operators, Norsk Tipping and Norsk Rikstoto. They oversee lotteries, sports betting, and online gaming.
However, there is a rising call for reforms. The Conservative Party recently submitted a plan to move towards a fully licenced gambling market in its election manifesto. The party called for the plan to be implemented by 2028.
Those in support believe that a liberalised market would be more effective as it would increase consumer protection, reduce black market activity and generate more tax revenues. Norway is looking to emulate Scandinavia, which has benefitted from a liberalised industry.
The Norwegian sovereign wealth fund, by its initiative, aims to tackle the risks associated with cryptocurrency and gambling. It further aims to potentially pave the way for the possible liberalisation of the nation’s gambling industry.
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