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Irish Banks Withdraw Banking Services of Legal Cryptocurrency Businesses

Irish Banks Withdraw Banking Services of Legal Cryptocurrency Businesses

Reading Time: 2 minutes by on June 23, 2018 Altcoins, Bitcoin, Blockchain, Business, Finance, News, Regulation
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Irish cryptocurrency firms have been forced to cease trading activities or open foreign bank accounts after banks refused to provide their services to the digital asset sector.

Irish Firms Face the Heat

A report on The Irish Times on June 21, 2018, confirmed the claims of cryptocurrency businesses and listed out several firms facing the unfortunate situation.

Cork-based Bitcove, a recipient of Bank of Ireland’s “best business start-up” award in 2017,  was “particularly aggrieved” by the situation. The bitcoin exchange has been legally operational since 2014, and enjoyed the banking services of AIB, Permanent TSB and Bank of Ireland. However, the banks have closed the company’s accounts.

Peter Nagle, co-founder of Bitclove, stated:

“The reasons cited has been that they do not support companies offering cryptocurrency exchange facilities despite the fact they had previously given us an account for this purpose.”

Nagle added the Bank of Ireland was “particularly disappointing.” His business was backed by the bank’s award program, and all operations were reviewed monthly by an official panel which including Bank of Ireland representatives. However, the move seemed like a media gimmick at the end, as Bitclove’s accounts were later frozen “and eventually closed.”

The company has not shuttered its business, and has found “a more progressive banking partner” in Europe.

While Bitclove was fortunate to have four years of banking support, several new companies complain of never getting an opportunity to open an account. Additionally, established small business enterprises have been “unbanked” by lenders.  

Bitcoin Businesses Close their Shutters

In April 2018, Ireland’s oldest bitcoin broker Eircoin was forced to close down due to “a negligent and defensive banking system,” as stated by co-founder Dave Fleming.

Fleming’s secondary cryptocurrency consulting business was refused banking services as well, despite having no business model involving large amounts of money transfer.

As stated by the report, the Bank of Ireland maintained its stance on not providing banking services to virtual currency exchange platforms, but added citizens are allowed to use the cryptographic forms of money.

Contrary to Bitclove’s claims, AIB denied rumors of refusing banking services to cryptocurrency companies offering crypto services:

“We don’t discriminate in relation to providing banking services to cryptocurrency companies nor have we been systematically exiting such companies.”

However, the bank stated mandatory Anti-Money Laundering (AML) and Know Your Customer (KYC) regulatory guidelines were not adhered to by some businesses, leading to withdrawal of services for non-compliance with local laws.

Meanwhile, Ireland’s premier financial authority, the Banking and Payments Federation of Ireland, stated it was not aware of any policy to close accounts which trade in cryptocurrencies.

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