Crypto companies complain they’re being shunned by most banks

[ppblockchain]

The gatekeepers of mainstream commerce are keeping their doors shut to cryptocurrency companies.

Entrepreneurs in the digital-assets industry from New York to Hong Kong say that even as some attract investment from multibillion-dollar institutions like Singapore’s sovereign wealth fund, they are routinely refused basic banking services by the likes of HSBC Holdings Plc and JPMorgan Chase & Co.

While top-tier banks are getting more crypto-curious—JPMorgan rolled out a prototype digital coin last month—most see the growing number of companies in the industry as they have since day one, ticking regulatory time bombs.

Crypto isn’t the only novel industry having a hard time accessing traditional banking to support its development, a federal prohibition on marijuana has kept big US banks out of the cannabis industry too.

“No bank is willing to help them out,” said Robby Houben, a lawyer and professor at the University of Antwerp who co-authored a paper for the European Parliament on financial crime involving cryptocurrencies.

“I have met some really stand-up people in crypto that don’t deserve such a bad reputation and want the sector to be regulated, yet for every one of those, there are plenty of others trying to scam the public, launder money or evade taxes.”


https://paperblockchain.com/crypto-companies-complain-theyre-being-shunned-by-most-banks/

[palle11]

...yet for every one of those, there are plenty of others trying to scam the public, launder money or evade taxes.”

It is not surprising that this above is one major reason that icos won't get financial support from banks. Banks are very shrewd business institutions, they wouldn't dive into a business venture they are not sure of recouping their investment. Icos have been bastardized and banks don't see them as a safe place to put money on. Big banks like citi, jpmorgan, hbsc wouldn't at all. They are eagle eyed banks, always looking for where the money at

[talkbitcoin]

...yet for every one of those, there are plenty of others trying to scam the public, launder money or evade taxes.”

It is not surprising that this above is one major reason that icos won't get financial support from banks.

nobody has ever supported ICOs simply because they are all scams. there is no exception between regular people or banks in this case. everyone sees the true nature of them but only few decide to ignore it because of the possibility of some profit.

[jseverson]

...yet for every one of those, there are plenty of others trying to scam the public, launder money or evade taxes.”

It is not surprising that this above is one major reason that icos won't get financial support from banks.

It's not even just ICOs being given the cold shoulder though, as even Kraken got the axe. It's pretty sad that banks are necessary for increased adoption.

One would think that banks are doing this out of spite, and maybe on some level they are, but it kind of makes sense why they're turning away crypto businesses.

[HODL2090]

...yet for every one of those, there are plenty of others trying to scam the public, launder money or evade taxes.”

It is not surprising that this above is one major reason that icos won't get financial support from banks. Banks are very shrewd business institutions, they wouldn't dive into a business venture they are not sure of recouping their investment. Icos have been bastardized and banks don't see them as a safe place to put money on.

ICOs are just one aspect of cryptocurrency. And I doubt ICO organizers approach banks or any traditional institution for loans to run their project, as it is too big a risk with hardly any collateral options.

Companies and industries associated with cryptocurrency should not be segregated as far as they are in compliance with all laws.

[figmentofmyass]

step 1: buy a bank. then you won't have this problem. i recall hearing that's exactly what coinbase did a couple years back. (not sure if true or not)

can you blame banks for being wary of crypto companies? these days, for money laundering and counter-terrorism reasons, banks are increasingly pressured to "know their customers' customers". i think they don't trust lots of crypto companies to implement proper KYC, and they might also be worried where exemption from money transmission laws isn't 100% clear and no KYC is involved.

[pawanjain]

This is quite obvious to expect from banks because the reputation of Cryptocurrencies and ICOs has not been good over the time. Both of these have gained popularity recently.
Banks basically hate cryptos because they think it will disrupt banks and will take away their profits. Banks don't believe in ICOs because most of the ICOs in 2017 turned out to be scam.
Just as the ICO space was gaining popularity and growing in size they started scamming people. Many people lost most of their money due to this and hence the era of ICO was over before it could start properly.
Such incidents has created a negative impact which is why banks and financial institutions opt to stay out of it.

[Beerwizzard]

But what if crypto related services just can't provide the necessary amount of legal support and different accounting stuff? If at the same time you see that all those startups that got 30mln each from ICO are running out of money without making any product it is pretty obvious that traditional banks won't be so enthusiastic with lending money to such projects.

[Jating]

Actually, even as an individual, it's hard to open a bank account if you says that majority of your funds are coming from crypto, I experienced this first hand so I'm not surprised by the attitude of big banks towards companies now who's trying to shunned even the basic banking services once they found out that your company is involved in cryptos.

I guess the obvious answer is that banking system really hates and think that crypto is a competitor that will despite their financial stability and will take a big slice on their profit. I just shake my head when 3 local banks here refuses me and my wife opening a joint banking account because of the word 'bitcoin'.

[Reid]

And yet they want to use the blockchain to create their own token. 
Isn't that funny?
It could be the reason why they dont want businesses affiliated with crypto currencies to join them or have a loan.

Majority will be ICO's, and that could also be the reason behind creating ICO. Banks wont support them to be funded for their projects so they end up wanting help from the public and also investors that would take the risk.

Let us see in the years to come if all of these will change dramatically. I hope not. Banks should just be banks, let them see how their market will start to go down without adopting the blockchain.

[soljal543]

cooperatives especially banks are scared of bitcoin and cryptocurrencies generally because of it's decentralized and speculative nature but it's a matter of time before they realize how great bitcoin is. They are just doing it to avoid loss as it is a risky decision

[btc_angela]

And yet they want to use the blockchain to create their own token. 
Isn't that funny?
It could be the reason why they dont want businesses affiliated with crypto currencies to join them or have a loan.

Majority will be ICO's, and that could also be the reason behind creating ICO. Banks wont support them to be funded for their projects so they end up wanting help from the public and also investors that would take the risk.

Let us see in the years to come if all of these will change dramatically. I hope not. Banks should just be banks, let them see how their market will start to go down without adopting the blockchain.

That's the ironic part isn't it? They kept companies/individuals away if they are engage in ICO or cryptocurrency but behind they love the technology. Blockchain has taken a front seat as far as big bankers now and they're implementing it to save them a lot of money. Good example is JPMorgan so decided to create their own crypto for their own benefits.

[gentlemand]

How many jurisdictions have completely clarified their position on crypto? Not many. Why should any bank play roulette with yet to be settled laws?

I can get how frustrating it must be for crytpo companies. I can also get how frustrating it would be for the bank to be landed with a giant fine for a trickle of business.

[davis196]

The irony here is that cryptocurrency startups need help from the banks.Crypto is and it will always be anti-bank,so seeking support from banks is like someone robbed seeking financial support from his robber.
If they can't receive financial services from the big banks,why don't they just create offshore bank accounts.

[stompix]

If they can't receive financial services from the big banks,why don't they just create offshore bank accounts.

It's pretty simple, if the big banks don't want to deal with you they won't deal with you no matter what bank account you have.
And owning an offshore bank account and engaging in thousands of transactions a day is a red flag for anyone, and might trigger transactions getting blocked from banks that have no idea you're dealing with cryptos or that have no problem with it.

Besides, whatever you say about banks, I still have to see a crypto company with a clear history, that wasn't involved in any scam, money laundering, tax evasion etc etc...

[romero121]

Cryptocurrency companies are much into the advancing of the same services that were rendered by the banking system. Recently some banks have given notice to its customers stating that the entire transaction made relative to cryptocurrencies were on their own risk. Every year banks state a big loss due to the existence of cryptocurrencies. Now some adopt it, while more banking sectors try to be against the cryptocurrency.

[BrewMaster]

...yet for every one of those, there are plenty of others trying to scam the public, launder money or evade taxes.”

It is not surprising that this above is one major reason that icos won't get financial support from banks.

It's not even just ICOs being given the cold shoulder though, as even Kraken got the axe. It's pretty sad that banks are necessary for increased adoption.

One would think that banks are doing this out of spite, and maybe on some level they are, but it kind of makes sense why they're turning away crypto businesses.

it is partly that but also it is about all the illegal activity that took place thanks to altcoins last two years. you see all these ICOs and think they are just scamming a bunch of newbies but many of them were actually laundering money through fake ICO front and cleaned their money by simply running it through that fund raising crap and dumping it on exchanges.

[Beerwizzard]

Every year banks state a big loss due to the existence of cryptocurrencies. Now some adopt it, while more banking sectors try to be against the cryptocurrency.

What kind of losses? Please name just the most significant ones with at least some numbers. Or you just took everything out of your head?

Recently some banks have given notice to its customers stating that the entire transaction made relative to cryptocurrencies were on their own risk.

And that's good because there are a lot of scammers that buy BTC on p2p platforms like localbitcoins and after getting cryptocurrency is asking his bank to make a refund. Now to prevent such kind of fraud will not be able to restore the "lost" money. Notice that clients still can send crypto related transactions but they are taking a full responsibilities for it.

[dothebeats]

It's just a shame that we need financial institutions such as the banks to further our crypto-related services. Though funding may be done through startups and public offerings, along the way, these crypto-related services will need the help of banks for their financial needs. Thanks to the ICO surge of 2017, many lawmakers have been dedicated to ensure that these things will never get funding and have collaborated with financial institutions to not get the same scenario 2017 had ever again. Saddening but well, this is what happens when a lot of scammers and money launderers flocked to a honeypot.

[Nadziratel]

The gatekeepers of mainstream commerce are keeping their doors shut to cryptocurrency companies.

Entrepreneurs in the digital-assets industry from New York to Hong Kong say that even as some attract investment from multibillion-dollar institutions like Singapore’s sovereign wealth fund, they are routinely refused basic banking services by the likes of HSBC Holdings Plc and JPMorgan Chase & Co.

While top-tier banks are getting more crypto-curious—JPMorgan rolled out a prototype digital coin last month—most see the growing number of companies in the industry as they have since day one, ticking regulatory time bombs.

Crypto isn’t the only novel industry having a hard time accessing traditional banking to support its development, a federal prohibition on marijuana has kept big US banks out of the cannabis industry too.

“No bank is willing to help them out,” said Robby Houben, a lawyer and professor at the University of Antwerp who co-authored a paper for the European Parliament on financial crime involving cryptocurrencies.

“I have met some really stand-up people in crypto that don’t deserve such a bad reputation and want the sector to be regulated, yet for every one of those, there are plenty of others trying to scam the public, launder money or evade taxes.”


https://paperblockchain.com/crypto-companies-complain-theyre-being-shunned-by-most-banks/

I think this is about legal regulations. In my country, many accounts are blocked due to money transfer with crypto money exchange platforms. However, with the basic application can reopen it later. Goverments should regulate this issue. A legal basis should be established for crypto investments and operations.