Bloomberg: Crypto Companies Still Run Into Trouble Opening Bank Accounts

Navdeep Garg
Bloomberg: Cryptocurrency Companies Troubles

Introduction

Blockchain technology has received a lot of attention over the last few years and despite the highs and lows in 2018 cryptocurrencies have actively made headlines in recent months due to the rise in popularity.  Cryptocurrencies are leaving a direct or indirect impact on people, organizations, and countries all over the world. When Bitcoin was introduced in 2009, only the people who were associated with it were able to participate in this network. Not many people were aware of the existence of blockchain technology until it received media attention and information about this groundbreaking technology began to emerge. Media coverage is one of the major reasons behind the popularity of cryptocurrencies.  

As cryptocurrencies have come to unchangingly dominate the news agenda and have become a topic of interest and curiosity to a much wider consumer audience, banks have had to decide where they stand. But all cryptocurrency companies are still facing problems as reported by the major financial publication Bloomberg on March 3, they still have trouble opening bank accounts. The report is based on the complaint of CEO of quantitative crypto trading company Alameda research, Sam Bankman-Fried, that “the standard answer of ‘just go to your local chase branch’ doesn’t work in crypto.” He added though it is not illegal for banks to serve crypto businesses, it’s a massive headache that they don’t want to put resources in to solve. 

The report has also pointed out that, while the larger banks avoid serving companies involved in crypto, smaller ones are trying to get hold of this underserved subset of the market. The example mentioned in the report is Silvergate Bank in San Diego, which reportedly said in November 2018 filing for an initial public offering that crypto businesses have as much as $40 billion to deposit. 

NKB Group, a blockchain investment, trading and advisory firm is another example given by Bloomberg of a company that has hustled to establish banking relationships. According to a report, companies in Malta purportedly also struggled with opening bank accounts. However, Swiss Bank has recently made an announcement that it will be providing access to digital asset services to its clients, following a partnership with crypto bank start-up Seba Crypto.

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Navdeep Garg
Article written by

Navdeep Garg

I'm founder and CEO of Revinfotech Inc. I traits in leadership and brilliant practitioner in the Financial Services and FinTech. I helped ban in connecting to the FinTech ecosystem through payment acceptance in blockchain as a service and even help i... read more

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