Banks in the UK have taken to rejecting applications, blocking accounts, and requiring further documentation from cryptocurrency companies
According to various sources cited by Bloomberg on Sunday, cryptocurrency companies in the UK are having difficulty obtaining banking services. Local crypto executives stated their unhappiness with the amount of documentation, blocked bank accounts, and denied applications.
It worsened when the three American-based lenders (Silvergate Capital, Signature Bank, and Silicon Valley Banks) left.
Banking Restriction Impedes UK-Based Crypto Companies
The UK banking situation has reportedly gotten so bad that some businesses have complained to the government. Local banks are fighting against Prime Minister Rishi Sunak’s aspirations to make the UK a center for digital assets.
SavingBlocks founder Edouard Daunizeau admitted that he had trouble keeping his company’s bank account secure. His cryptocurrency firm, SavingBlocks, offers a variety of portfolios for passive investors.
Also, Joe David, an executive and co-founder of Nephos Group (a crypto firm), revealed that Wise PLC, a platform for transferring money, had frozen the account of his company for over three years—an act he sees as a breach of contract.
When contacted, a Wise spokeswoman stated that the platform does not encourage businesses that use cryptocurrency and that it freezes the accounts of customers found to be participating in such operations.
The Decline of Crypto Venture Capital Investment
Large banks such as HSBC Holdings and NatWest Group have since put limits on how much money their customers can transfer to cryptocurrency exchanges.
Due to the current banking limitations, UK lenders are already falling behind the rest of Europe in the cryptocurrency market. According to the data from Venture Capital (VC) research firm PitchBook, VC investment into startups that deal with digital assets decreased by 94% in the first quarter of the year 2022, while it increased by 31% in the rest of Europe.
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