Bitcoin Forum

Hello all,

Its not often that I get annoyed. I pride myself on staying cool, calm and collective - and taking things in my stride. However today after being told yet again by a UK bank that they could not facilitate my business (trading bitcoins) I found myself becoming irritated and quite frankly pissed off.

I am fed up with UK banks declining me for a business account for my trading business. I was wondering if anyone else has been met by the same firewall? I don't understand why a UK company, in a free and democratic society, should not be allowed to conduct business in the order they see fit - as long as no EXISTING legislation prohibits these practices.

The total irony is that my business ran smooth as a nut until I made one fatal mistake - attempting to take my company down the appropriate legal path. Even though I do have some anti-establishment tendencies, I believe in being a good citizen and paying my dues.

UK banks firewall on anything bitcoin related is not only morally reprehensible and totally wrong - but it stiffing my country from competing in a new and exciting technology.

This is the straw that broke this camels back.

I personally now would like to fight this battle further, and would be extremely interested to hear from others who would like to participate in this undertaking. I'm not asking for much. More communication from bitcoin related businesses operating in the UK and the wider UK community, a few signatures on letters here and there, maybe a little guidance from people who feel competent enough to give.  

Enough is enough people, time to start demanding answers on the UK's stance on bitcoin.

maybe write a better business plan that wont confuse them. im with halifax and they love me.

I don't even get a chance to show them my business plan. The moment I mention bitcoin they say they can't facilitate me. I have been waiting for a phone call back from Halifax for 3 days now.

set a meeting with a bank manager at your local branch.. head office call centre staff are not bankers, they are customer service reps with most probably ASDA retail experience on their C.V.

go to local bank manager with proof that bitcoin is safe, that you know the EU wire transfer regulations and all the other info on pound coin transactions.

as long as you show you can manage pound coins and do so responsibly that is one of the big hurdles. by you setting limits per customer per day helps reduce the banks own risks and the amount of double checking banks are required to do.

dont just turn up to the meeting or answer the phonecall "i sell bitcoin... gimme account". make a proper planned script/ presentation that shows that you have all the known issues worked out and fully controlled.

if they say no.. ask why. get a definitive answer.
once you get the answer ask how to solve their issue.

dont just walk out with a huff.

i found the only issue was they were worried about people washing their bank notes with soap... oops i meant the other type of money laundering..

once i told them about my due diliegence checks and money limits etc, i got accepted. and the manager said if i had any issues due to head office to speak to him and he will then explain to head office.

2 years and touch wood.. no problems

+1

parliament are... kinda democratic. well the 500 people that get paid talk to each other and decide how to screw the country over.. but banks dont do voting. they are a corporation, which is definitely not part of the free democratic society. even though the word free is used more to do with that parliament are free to do what they want as long as their 500 peers vote on it. (nothing to do with citizens voting/choosing).

i don't believe in voting. especially in england. whoever you choose to control the country will just end up screwing you over, there is no point voting for one, they all are the same.
and i do not believe the general population knows who is the best person to vote for either.. after all it was only a couple years ago that a dancing dog won britains got talent.

Firstly, thank you for taking the time out to offer me your guidance. I appreciate you have been successful in this field, but I feel you may have underestimated the problem.
 
I have ran two successful businesses in the past and subsequently feel I have some degree of competence in presenting a business to a bank manager. This is not the problem. The problem is getting in the room in the first place. When I approach my local bank they always inform me I have to ring and book an appointment - so I have no choice but to speak to the 'asda' trained call-center staff.

I also know this is not just a problem for me. Firstly I would like to link you to an article where the author is having exactly the same issues:

https://www.scirra.com/blog/tom/4/bitcoins-uk-future-looks-bleak

Members of this board have also complained about being 'strangled' by the national banks:

https://bitcointalk.org/index.php?topic=484490.0;all

I have communicated with two UK bitcoin businesses today and I have no doubt you would know at least one of the businesses by name (I wont reveal due to confidentiality). One stated that they have no choice but to use offshore banking facilities whilst the other admitted he outright lied in order to gain access to a bank account (the first also suggested I should lie).

I suspect, without meaning to sound rude, that your ease in setting up a business account was due to the date you set up (you said almost two years - before bitcoin was on the mainstream radar).

Again - I don't wish to sound offensive in any capacity as I am thankful for your response. I just wished to outline the information I know.  

Hah! Although your statement is fully correct, compared to some of the worlds corrupt states we do have some vague resemblance of a free society. Just don't mess with the banks.

I'm hearing this a lot amongst us UK people. I do think it is a serious problem. Which banks have you tried?

fully understand.

i don't think it is the new mainstreaming efforts surrounding bitcoin vs the lack of knowledge a couple years back that made the difference. as i had to explain the whole silk road rhetoric to them and explain how i would reduce/remove risk of banking facilities being linked to criminals. which today is not a problem.

i think, from my experience the bank manager i spoke with was very understanding and seen the positives. where as some other branches probably have narrow minded old school banking personalities.

all i can say is don't give up the fight.

i know that in one of the conversations i mentioned that bitcoins does not affect the pounds stability or usefulness. because the purchase or selling of bitcoins is a simple movement of pounds from buyer to seller. so bitcoins can be categorised in the same manner as a car dealership that helps banks circulate funds between uk accounts. that it is nothing at all like foreigners putting bank notes into envelopes and posting it abroad (making it out of circulation). bitcoins helps fiat circulate, which banks want and love. and reduces the need to take bank notes out of the system via royal mail.

i have had many conversations and im not sure which point 'green lighted' the application, but as i said

don't give up the fight

In Australia the best bet is to promise to only accept cash deposits.

That way there is zero risk of people claiming the transfers were stolen etc.

Might help.

I realise it is a lot to ask but is there maybe a chance that you could speak to your bank contact and ask them for other contacts within Halifax that would be willing to listen to small bitcoin business owners/entrepreneurs who have a solid business plan and now need a bank account?

At least then when the next thread comes up on this board of a UK business owner despairing at not being able to get banking (this is the second I've seen this week), we could say, "franky1 has some banking contacts who are at least willing to listen to you, ask them in PM for the details"

Just don't tell them about bitcoin, simple. You don't have to lie, just skirt around the issue.

I really would not advise this course of action if you're an honest businessperson (yes, I realise that banks are some of the most dishonest organisations in existence). This is a Mark Karpeles move.

Just think about what happens if your business is established and operating and then one day the bank decides to freeze your account. You suddenly can't pay any of your suppliers or staff and depending on your type of business you may even have customer funds in there. This can kill your business, lose you staff and customers.

Changing bank account voluntarily was one of the most awkward things I had to do for my own business and that was prompted by myself with no issue of freezing. I can't imagine how disruptive it would be to have it frozen.

Honestly I'd rather the bank said no up front than find out I lied and shut me down once I was in operation.

Also it may not even be possible to skirt around the issue. The last two business current accounts I applied for required an in-person meeting to discuss my business, which both times touched on how my customers will pay me and how I will pay my suppliers.

If you're running a bitcoin-related business as a registered company in your jurisdiction I really think you need to have a good relationship with your bank.

Meh,

I sell bitcoin hardware by the 100s of K. My bank thinks I sell computer hardware, I do. Why would I tell them the hardware was bitcoin related?

You wouldn't, I agree. I don't really consider that strongly bitcoin related.

Your customers are buying hardware that does something related to bitcoins. I was more thinking along the lines of businesses that sell and trade bitcoins for GBP.

You can still run into issues.  A high volume of cash deposits can in itself cause you to be deemed "high risk" under a bank's risk management policies (which they are required by law to have and implement).  "High risk" accounts aren't generally worth the administrative burden and compliance costs they incur for the bank.  A single fine in relation to activity on your account could cost them millions.

You need to understand that banks don't give a shit about what people do with their money.  They care about whether having you as a customer is going to expose them to liability and whether they're going to make a profit from having you as a customer (you're less desirable as a customer if servicing your account costs them more than servicing the account of another customer with a similar pattern and value of transactions).

I was Born in the UK, my brother still lives over there... We were just speaking about TSB and how they are doing a lot of under-the-table "hush-hush" deals to win customers over. So, if you haven't already, I'd suggest that you visit your nearest branch in person - rather than just giving them a phonecall. If you want to tell them what you're business really does that is up to you - I wouldn't - but there you go.

Another option would be one of the Crown Dependencies. As a UK citizen you have rights in those countries that allow you to bank there. Jersey, Isle of Man, Cayman Islands etc. I would go with a long established private bank rather than the usual HSBC's etc... Less questions asked, Less international interference, Zero Tax etc. This is probably your best bet but, again, I wouldn't tell them exactly what your business is - the less complicated YOU make things, the less complicated things will be

Ah its good to see all the responses. I thank you all for your support - I will try to reply to all of them in this message but it may take two


I have tried Halifax, Lloyds, Barclays and Santander. I have not tried the others as I wish to change tactic a little.


You're a legend - thanks again.


I believe this is a risk the banks would not be willing to take as there is high risk of money laundering. It is also unsuitable for my business model as I would significantly reduce my customer base.


I admire your optimism but I doubt that one bank manager around the country is going to able to help a wealth of bitcoin related businesses. This is a systematic problem that has to be tackled head on.


I was thinking of doing something similar, or changing my business plan accordingly and start introducing bitcoin at a later date. Maybe, just maybe. It still pees me off that one would have to go to one lengths - its not like I'm selling methamphetamine to kids.


I totally agree, I have never done a days dishonest business in my life and I really don't plan too.


You are bang on there my friend (but they DO give a shit about BITCOIN - this is the problem). The total fucking irony is that when I ran a business selling silver bullion the banks didn't give a shit - and the business model is exactly the same.


The problem with going to branch is when they ask you you're turn over. I turned over 75k in a month and a half and whenever you state you turnover more then say 150k they instantly tell them you have to talk to there senior managers and you will have to book a meeting via telephone.

The crown dependencies is not an option for me. I sell to the British market, who want to be able to deposit it my bank account instantly and without charges. The crown dependencies will not offer me this benefit.

---

This is a huge problem in the UK and its one that needs to be addressed. Upon looking around at other people have have experience similar problems there seems to a reoccurring problem, not enough people complaining to make the powers address the issue fully. This is why I think we should get organised, so we can all send correspondence to the same people, sign petitions and do this the old fashioned way. It is the only way that will work (although it will take some time).

I don't understand why a UK company, in a free and democratic society, should not be allowed to conduct business in the order they see fit.

Duly noted and changed. Want to be my grammar checker in the future  ;) ?

So you agree that a UK company (a bank) should be allowed to conduct their business in the order they see fit (refuse to accept any customer they like for any or no reason)? Or is that the point you are making?

I think he was correcting my grammar - may be wrong though :) .

Im with Lloyds and Yorkshire bank, just dont mention the B word and youre ok. they'll come round eventually when they can see theres money to be made, it only takes one major retailer to start accepting BTC in the UK and bingo, bet they wont close Tescos bank account.



 :D

I also accept payment in BTC that ends up in GBP in my bank. I don't tell them that either ;)

Yes I think so, even if it might sound strange, but it you want freedom for the people you can't force some of them to do a specific thing you want them to.

With bitcoin everyone can be his own bank. The bitcoin protocol does not discriminate against anyone and this is how it should be, but traditional banks are led by people that make decisions and if they decide not to do business with you, I think thats their choice.

Right, which is why I haven't said anything about legally forcing them to or anything.

I'd rather find strategies for getting them to see that it can be in their interest, find banks that can be worked with, etc.

It is a real barrier to bitcoin business to not be able to have a bank account that your customers can easily deal with and have trust in.

Try Euro-Pacific Bank. I'm not sure what their take on BTC business would be, but they are happy to facilitate transfers to and from exchanges.

Have you tried Metro bank?

My friend is Somalian and had a million and one issues with the whole funding terrorism thing when he got into some sort of mining deal with some Somalians back home and Metro were the only bank that'd touch him with a bargepole.

I think they're only in London though

Fidor Bank in Germany has Kraken and bitcoin.de as partners. Idk how easy it is to open an account with them for non-Germans, but I use my banka cocunt with them for bitcoin trading and never had a problem.

Sending money to a bank in Germany will cost UK people about £8 and take 1-2 days. It will also end up denominated in EUR so undergoing a currency exchange. There will also be less trust placed in a bank that's in Germany: "why is your bank in Munich if your company is in London?"

That's not that bad, but there's definitely a group of people who would rather deal in their own currency, locally: Sending funds to another UK bank ranges from instant to 30 mins and is free.

The UK is definitely not an open, free society. It's an oligopoly, run for the benefit of a small minority and the expense of everyone.

Don't kid yourself, as an individual you have basically no rights unless you have political connections or a lot of money. The banks don't care about you. Case in point: I have a perfect credit history and interest rates are 0%, so no cost to borrow money. However, I was declined even the ability to apply for a OVERDRAFT.

As stated , a small number are profiting at the expense of everybody right now. It's unacceptable but somehow unquestioned. If you want a chance at succeeding In th UK , your bet shot is to join the government.This is not what happens in a free society. This is what happens in 1980s Brazil, 1930s Germany, 1940-1990 Russia, 1950s China.

Basically, forget the banks. The whole system is run by and for the benefit of criminals. Bitcoin is the alternative

I dont know what you are trying to do but you could try speaking to GigaTux, he has a registered UK business trading BTCBTCBTC so may be able to offer advise... Unless you would be competing with him  ;D

I don't disagree. I would rather re-frame from going down this particular road as I want to discuss solutions, not bitch about the system.

I will say this though the irony is that this problem rests with the 99% not the 1%. If we hadn't of been so apathetic towards politics in better times, we almost certainly would never have ended up in the position we find ourselves in today. We actually probably could still change 'the system'- but it would require people to actually get off their asses. A no-go I can assure you.

Intersango banked with them. I'm pretty sure they've had their accounts closed.

Personally I'd approach the FSA and apply for a Money Transfer license even though technically you do not need it.

Next is to register with HMRC as a High Value Dealer. Let them know you're at risk for money laundering and ask how you can protect yourself.

Your business plan should emphasise how you plan to combat money laundering and fraud, for example by accepting payments that cannot be 'charged-back'. Then walk into the bank armed with all this and you might have a fighting chance.

----

It's not just UK banks that don't want anything to do with Bitcoin. I approached Currency Fair with the hope of being able to accept international wires to exchange to Bitcoin and although they were receptive at first, an interview on BBC Radio 1 with regards to Silk Road ended that.

Now they explicitly forbid even personal transfers to Bitcoin exchanges in their FAQ.

OK. I want need a bank account in the UK that my customers can send money over too, so I can sell BTC. That simple really.

What I am trying to achieve here is more though. I would like to get UK bitcoin users to start discussing our predicament and get a little better organised. As original stated I'm not asking for much. I have no problems in doing the donkey work - just I will need limited support.

My current ideas are:

• send an open letter to a basket of MP's - asking when politicians are going to have an open debate about the subject like we have seen in other western countries.
• put more pressure on HMRC to confirm their classification of BTC
• start an e-democracy petition - which if recieves 100,000 signatures politicians will be forced to discuss.
• send an open-letter to the banks from a confederation of BTC business owners, demanding explanations towards there current stance on bitcoin

These are just preliminary ideas, but it would be useful to have a group of people who don't mind signing things, forwarding emails, discussing ideas etc.

Now that Scan are accepting bitcoins have you considered talking to them about their experience?

I know they are just using Bitpay at the moment, but if their acceptance of bitcoin is going well then perhaps they would be willing to co-sign a letter that asks UK banks to be more open to the idea that there is legitimate business that takes place using bitcoin.

Thanks for the information. I will be in contact with them. I am in touch with a few UK bitcoin businesses.

What service does you bitcoin service provide? Is it currently up and running?

What's the address if you don't mind me asking?

HI,

I appreciate you're looking for practical solutions.

Let me make a few points though:

(1) All UK banks are extensions of the government, even if they are not directly owned by the government. AT some point then, even if not immediately, they will have to accept the government's line on bitcoin.

(2) For this reason, I think your best approach is to start at the government level not the bank level

(3) I would follow up by suggesting you meet the bitcoin group of supporters, based in London. There is a meetup group called Bitcoin London, I would suggest maybe talking to them in order to organize a collective effort.

(4) Finally - I would say that it will require huge action to get a UK bank to operate with a bitcoin exchange . Why ? Because it needs change at the government level, and that is not forthcoming right now.

Im not saying its impossible, but it is going to be quite a task.

Honestly, if I ws you ? Just buy bitcoin and hold.  The time will come when the government is forced to take bitcoin seriously. Until then, it will continue to be hard to operate a bitcoin-related venture in the UK.


PS. in the interm, I appreciate that means it's perhaps more difficult than it needs to be to acquire bitcoins. However, at least you can (still) buy them.

Take it offshore, and do yourself a favour!

Hi Xavier,

Thanks for taking the time out to give me your thoughts. This is exactly what I need.

You are totally right and I do primarily want to target the government level as opposed to the banking level. Subsequently I will expend more energy at this level then the banking level. It would however be interesting to see what response the banks give - you never know they may be insightful or even offer a hand (no chance ;) ).

Your suggestion in number 3 is a great place to start and I will act upon this over the weekend. I appreciate the enormity of the task but I feel that we as a community should be doing more to challenge the power structure over these issues. The UK has been exceptionally slow in adapting bitcoin - I can't recall any politician even discussing it (though i may be wrong).

Hah - Yeah, maybe. Its just that I have always liked doing business and have never been much of an investor - though this is slowly changing.

Again, many thanks

James

With all due respect its doing no one a favour. We can't just ignore these issues, we have to at least try.

Much respect,

James

I don't disagree with your points, including this one, but can I ask:

What is it that you feel is different about UK government-bank relationship that isn't the same for, say, Germany and Fidor bank?

Are you based in/near London?

I am and I would be interested in taking part in what you're proposing, so if you are doing something near London please do announce it on these boards.

Myself I have a tiny business (nothing compared to the turnovers you mentioned earlier) that does accept bitcoin payments, but doesn't sell anything related to bitcoin so I haven't run into those issues. I do buy and sell bitcoins personally and have had a number of negative experiences with banks. I also have seen this a lot on these boards. I'm interested in the adoption of bitcoin the UK and feel it is a shame the way things are, would be interested in doing something about it.

People will have to vote with their feet when it comes to this one. Its the only thing that really works.
Take it as a vacation

Hi Griffers,

Firstly apologies for the lateness in reply - it's my birthday (hint, hint) so been a little sidetracked :) .

I am not actually based in London - I live in Liverpool but am from around Bristol (still spend a lot of time down there). I will email the relevant people tomorrow and will keep everybody posted on what has been said. If all goes well I am sure this will involve something going on in London as its the most logical place to begin.

I can't thank you enough for showing your support - we can do this :)

James

P.s. Again - I WILL keep you posted

I am probably being dumb here, but I am failing to understand. Can you enlighten me please :) ?

reading the posts i have some advice.

banks dont talk to MP's, lords or the prime minister.. well not as much as HMRC PRA. so i think you would get more results from HMRC PRA. also get paperwork from HMRC/PRA that categorically says bitcoins are not illegal. dont just go to a bank manager meeting and allow them to say no, ask why. then ask what is required to get approval. show initiative professionalism which of course will show that you want your business to succeed.

as for getting licences to help persuade a bank, one method that may work for you all is to group together and form a co-operative/consortium and have that as the money licence entity. then have your individual businesses/projects as subsidiaries of that main entity.

... well even setting it up as a franchise model could work too....

make it into a bitcoin UK (i wont say foundation although thats the aim) consortium

this would reduce individuals cost of being legal and also show that the projects have a chain of command. rather then looking like a basement dwellers hobby.

i spoke to my bank manager again and he said that they are not oppose to bitcoin, but they are oppose to high risk, and lots of admin.

the easiest way to implement risk reduction would be for you to take peoples driving licence or other government id (passport) at registration. and when doing a transaction ask the customer to take a webcam photo of their face and holding a piece of paper up with their username and a random jumble of characters that represents that transaction request,  with the QR code of their receiving bitcoin address. then customers cannot claim they were hacked and someone else done the transaction. and the qr code can be used in relation to the blockchain to prove the transaction occured.
EG: (excuse the babyish 1 minute image production quality)
http://i60.tinypic.com/2vc9dzl.jpg

any dodgy customers that want to hide away, you dont want to be trading with anyway. so the customers that are legitimate would follow the requirements because thats the legal requirements of FIAT.

the other stuff is to also compare the ID details (name) to their bank account details. (there is alot more stuff to do, but this is just some examples)

all of this is also to show proof of authenticity, if (lets say a chargeback scammer) someone tried to reverse a wire transmission. having stuff in your terms and conditions and ensuring the banks that you will validate EVERY customer that way, will reduce their need to investigate transactions as much. and if a investigation does happen, you can quash the customers allegations easily, which banks love (less work for them). the idea above also works for paypal. they have actually refused a chargeback due to some people showing enough proof of a bitcoin transaction. (even i was surprised)

the problem i see many times is that people wanting business accounts, do not want to do KYC. and that is the issue. even if you stick below the EU wire transmission limits to not need a licence. still do KYC.

if you dont want to do KYC then you dont want to handle the bankers patented product (FIAT). remember FIAT is not your property. its just an IOU of something that the banks OWN. you simply have to follow the financial rules if you want to handle their product.

which is why we love bitcoin,.. the day when we can buy groceries and pay our rent without the headache of banking will be the best day ever.

It's not always about KYC.

London Gold Exchange had some of the strictest KYC requirements and they still had their UK banks closed.

Other than that your webcam idea is too much friction. Customers will just go elsewhere.

I mean moving the business to a more bitcoin friendly country.

Its not the ideal solution of course, but if some governments fail to strike the right regulatory balance, that could be the only alternative

Exactly.... if BTC is a global business, the global solutions are also of much warrant.  I understand the emotional need to be a local patriot.  However, business functions on rationality.  I'm sure that the UK banking and Govt sector would react quicker if they would see the 'potential' being exploited by other more 'open' governments and institutions.  I mean, for instance, NIKE had no issue with shifting their manufacturing to South East Asia, as they firmly believed that it was good for business.  Not sure if they were to worried about 'local patriotism'?

Lets be fair, if Bitstamp was formed in the US and not Slovenia, would they have achieved their success??

I'm sure Malta would be very interested in you :-)

again.. people not wanting to do KYC !!!!

as for going elsewhere. tell me what "elsewhere" services allow UK bank Faster payment..

by being legal in the UK you have to do KYC. if you want to run a business in a different country/avoiding KYC, then your dodging FIAT laws, avoiding bringing new enterprise to UK and also adding extra costs to the customer (fiat exchange rates, delays)

this thread is about UK business owners wanting UK infrustructure. not passports to move to malta

There's no doubt you have to do KYC but getting on a webcam everytime you want to login or move money is a massive amount of friction to customers. Bitcoin's main demographic is males 18-25 who distrust government and value their privacy. I doubt they'd use your 1984 exchange.

Scanning your passport and uploading it to somebody who could be storing it insecurely is bad enough.

I don't know where your passports and Malta comment came from...

When we change our coin to fiat we often do it on Local Bitcoin.

We ensure every buyer name on local bitcoin matches bank account name and require government ID for new buyers. All of this is kept stored for reference if any problems later arise.

We feel this is enough to remain compliant and legal.

thank you for showing proof of why banks wont trust you (the people with bitcoin ideologies (not making personal attacks)).
you think you can ignore the FIAT laws because its in the best interest of bitcoin users. this is why you should not be dealing with fiat on a large scale. if you dont like fiat laws then set up a altcoin exchange that does not trade in fiat. purely altcoin to alt coin.

if you want to trade in fiat then follow the fiat laws. its just that simple.

my passport for malta comment was about instead of trading in the UK some people advise to go offshore which again avoids the UK laws.

and studio1one:
what you "feel is enough to remain compliant" has nothing to do with what the regulations REQUIRE you to remain compliant.

guys please do not ignore the regulations of fiat based on personal feelings. the law is the law. until we change the law we have to obide by it. so either change the law of follow it. dont ignore it or you will never get banks trust.

(i personally have the same ideologies as you. but personal and business should not mix when it comes to the law)

Again I'm not sure why this is directed at me when I've stated several times that Bitcoin exchanges should be following KYC and taking IDs from all clients including those that don't touch fiat (altcoin <-> altcoin).

Legally you may very well be able to do altcoin <-> altcoin exchanges and require no ID but I'd take it pre-emptively in-case money laundering is occurring.

Once an account is verified then there's no need to re-verify a client from a KYC perspective. That's just unnecessary friction.

Can I ask have Yorkshire Bank not caused issues as they are part of Clydesdale and I have some business accounts with them already so hence wanted to check with them if there open to Bitcoin

Hi,

Who are you banking with for trading on localbitcoin may I ask?