Crypto Companies Difficulty Accessing Banking Services In The UK

Crypto companies are facing difficulties in accessing banking services in the UK. (photo: Doc. Pixabay)

JAKARTA - Crypto companies are facing difficulties in accessing banking services in the UK, according to several sources interviewed by Bloomberg. Some banks still working with crypto companies are asking for more documents and information about how they monitor client transactions.

Challenges faced include rejected applications, frozen accounts, and excessive work papers. In fact, crypto companies have complained to British Prime Minister Rishi Sunak's government, as the situation has worsened in recent weeks. This move goes against Sunak's plan to prioritize financial technology disruption and make Britain a global crypto hub.

"The UK banking reaction is more acute than the European Union," Tom Duff-Gordon, vice president of international policy at Coinbase, told Bloomberg.

According to Duff-Gordon, the European Union's efforts to establish a framework for digital assets have made banks more responsive to crypto companies in other countries. The European parliamentary committee approved the legislation of the Market in Crypto Assets (MiCA) in October, nearly two years after its introduction in September 2020. Its final vote is scheduled for this month.

So far in 2023, venture capital investment in digital asset companies reportedly fell 94% to 55 million US dollars (Rp841.1 billion) in the UK, according to data from PitchBook, fighting a 31% increase in other countries in Europe. Crypto companies are turning to payment service providers such as BCB Payments and Stripe to keep business operations in the UK.

Also reported by Cointelegraph, in March, HSBC Holdings and the Nationwide Building Society banned the purchase of crypto via credit cards for retail customers, joining a growing list of banks in the country tightening digital asset restrictions.

Also in March, the CryptoUK exchange trading association proposed the creation of a "white list" of listed companies in the country to address restrictions or ban transactions with crypto companies by banks.

"Many major UK banks have now imposed restrictions or restrictions, and we are concerned that banks and other Payment Service Providers (PSP) will also follow in the footsteps immediately," CryptoUK said. "We believe that the government's actions are now needed."

Just like in the United States, authorities in the UK are tightening regulations against crypto companies. The Financial Conduct Authority proposed in February a series of rules that could ensnare crypto company executives with a two-year prison sentence if they do not meet some conditions related to promotion.