Big Banks Deny To Bank The Crypto, Firms Struggling to Open Bank Accounts

By Tabassum
Published March 4, 2019 Updated March 4, 2019
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Big Banks Deny To Bank The Crypto, Firms Struggling to Open Bank Accounts

By Tabassum
Published March 4, 2019 Updated March 4, 2019

Its been a decade for the existence of Bitcoin – but the definition of crypto for many banks across the world are still vacant. Reports that the crypto companies are struggling to find accessibility to banking accounts.

Big Banks Are Not Willing to Bank the Crypto Industry

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As per the Bloomberg report, existing customers of Big banks like HSBC Holdings Plc and JPMorgan Chase & Co are facing difficulty to access basic banking services because the banks are routinely refused to do so. (To note,  these customers are the entrepreneurs of crypto-related firms across NewYork and Hong Kong)

“The banking system has never been friendly to crypto, and while maybe that made some sense in the early days, continuing to label all crypto businesses as high-risk is indefensible and protectionist. I’m washing my hands of them and now avoid banking altogether.” Said Mark Lamb, CEO of CoinFlEX, Hong-Kong based crypto derivatives exchange

However, as recently reported on Coingape – leading Singapore’s Sovereign Wealth Fund (IGC) has helped the top cryptocurrency exchange, Coinbase to raise millions in its funding round. On Contrary, banks are not in a positive tone for the individuals associated with the digital asset companies.

Robby Houben who is a lawyer, profession and a co-author of a paper drafted on ‘European parliament on financial crime involving cryptocurrencies’ says – ‘No bank is willing to help them out’. Adding that he elaborates what few crypto associated peers said him;

“I have met some really stand-up people in crypto that don’t deserve such a bad reputation and want the sector to be regulated, yet for every one of those, there are plenty of others trying to scam the public, launder money or evade taxes.”

Supporting Blockchain Firms But Not Crypto-Related Ones

In addition, the Times of Malta claimed that many banks believe ‘opening bank for individuals related to crypto firms is a ‘risk appetite’ for them – as such, few fintech firms and legal entities had also confirmed that banks denied their applications to do so. However, its worth to note that Silvio Schembri, a parliamentary secretary for financial services allegedly report the clear statement of banks – that – they’re quite open for blockchain firms to support with bank accounts but nor for cryptocurrency-related entities. In this stance, Silvio Schembri  said;

“one should make a clear distinction between blockchain operators and crypto operators.” He added; “The general understanding is that when it comes to crypto operators, banks are waiting for operators to obtain an MFSA [Malta Financial Services Authority] license before opening their doors – which is understandable.”

However, by taking an instance of local Chase branch (the bank of which has recently announced the launch of their own stablecoin – JPM Coin ), Sam Bankman-Fried CEO of digital asset trading firm, Alameda Research – states that, if you go to the local Chase branch, it doesn’t work for crypto. He goes on stating that;

“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.’’

What would you suggest banks to get involve with Crypto? Do you think Banks are perfectly right to do so? Share your opinion with us. 

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Disclaimer
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
Tabassum
562 Articles
Tabassum is a full-time content writer at Coingape. Her passion lies in writing and delivering apt information to users. Currently, she does not hold any form of cryptocurrencies. Follow her on Twitter at @Tabassumnaiz and reach out to her at Tabassum[at]coingape.com

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