The relationship between cryptocurrencies and traditional banks are still far from easy. In a recent Bloomberg report it becomes clear that companies in the cryptocurrency space are being denied banking services from the major global banks.
They can get multi-million funding but can’t open a bank account
Sources to Bloomberg shares that many companies and people in the cryptocurrency space can get multi-million funding from global investors, but securing basic banking services are near impossible to get. Right now most banks are describing the process of onboarding crypto companies as a AML (Anti-money laundering) nightmare. And that they don’t have the processes set in place to facilitate those industries yet.
“It’s not illegal for big banks to bank the crypto industry, but it’s a massive compliance headache that they don’t want to put the resources in to solve.’’Sam Bankman-Fried, chief executive officer of Alameda Research, a digital-assets trading firm in Berkeley, California
The market needs to be sanitised first
It becomes clearer every day that until further regulations are in place, and until a majority the ill minded players (read scammers) are being removed from the cryptocurrency space, this situation won’t improve. So until progress is made here, banks are continuing to hide behind the AML/KYC issues.
Days after its new JPM Coin surfaced, the largest U.S. lender told Chris Matta, co-founder of an investment firm for digital currencies in New York, it will not bank crypto businesses.Bloomberg
Obvious double standards?
Some of the banks mentioned that are today refusing to service various crypto companies are HSBC Holdings Plc and JPMorgan Chase & Co. What’s obviously very interesting is that the latter recently announced the launch of their own cryptocurrency – JPM Coin (read our article on it Then: “Bitcoin is a fraud” – Now: JPMorgan launches their cryptocurrency). So questions might be asked their intentions and dealing with the crypto space.
This problem has been going on for years now
This problem is definitely nothing new and there are plenty of similar reports across Europe. This causes obvious problems for companies that wants to operate their businesses from countries like the UK and U.S. The problem is also something that affects both businesses but also private banking customers. Where reports have been common that people have gotten their bank accounts closed without information and on very questionable methods, as soon as it’s become clear that they have bought or sold cryptocurrencies.
“The moment you mention crypto to a bank, it’s like you are a drug dealer.”Iqbal Gandham, UK head of eToro, a social trading firm that has handled more than $1bn of cryptocurrency trades for clients since adding the asset class to its platform this year, said:
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Per Englund – Founder of Go CryptoWise a cryptocurrency and tech fan that wants to see better and smarter products and services that makes our lives better and easier