• UK banks are reportedly refusing applications from crypto firms, freezing accounts, and requesting additional paperwork.
• The situation is worsened by the departure of US-based lenders who used to provide banking services to crypto startups in the UK.
• Crypto executives have complained about the issue to the government, but there has been little progress so far.
UK Banks Refuse Service to Crypto Companies
UK banks have resorted to rejecting applications, freezing accounts and requesting additional paperwork from crypto firms according to a recent report by Bloomberg. This refusal of service is making it difficult for crypto companies in the United Kingdom to obtain banking services.
US Lenders Departure Adds To The Problem
The problem has become even more dire due to the departure of United States-based lenders such as Silvergate Capital, Signature Bank and Silicon Valley Banks. These banks had previously provided banking services for crypto startups in the UK but their absence has left a gap which local banks have yet not been able to fill.
Crypto Executives Complain To The Government
Crypto executives have lodged complaints with the government regarding this issue but so far there hasn’t been any progress towards resolving it. Despite Prime Minister Rishi Sunak’s efforts seeking to establish UK as a digital asset hub, local banks seem adamant on working against this initiative instead of being part of it.
Struggle To Open Bank Accounts
Edouard Daunizeau, founder of SavingBlocks – a company offering a range of portfolios for passive investors – revealed that he had difficulties securing his company’s bank account despite approaching 9 potential lenders; 7 rejected him whilst 2 requested additional documentation regarding how he monitors his clients‘ transactions before they could approve his application. Joe David, co-founder of Nephos Group – an accounting and professional services firm focused on cryptocurrencies – also shared similar experiences with money transfers being declined or delayed for days at a time due to ongoing investigations into potential money laundering activities related to cryptocurrency businesses.
It appears that unless something changes soon then UK companies will continue facing these issues when trying to open bank accounts or receive payments related to their cryptocurrency businesses.