HSBC canada not allowing to buy any crypto related instrument

[Antonioz]

So I already own some crypto but just for the sake of it I tried to buy a tiny portion of BTCC (the canadian bitcoin etf) , or other crypto related instrument, and whenever I try HSBC invest direct (in canada) blocks the order, saying:
"alert! your trade ticket was rejected due to no trades allowed on Virtual Currencies"

here are some snapshot of the message:


https://drive.google.com/file/d/1OPs9DLOvtD7s7ExpUU4vhVSjpgt0dUz4/view?usp=sharing

https://drive.google.com/file/d/1qQSDItkOqJNAvvm3D67kCx3AWqYdim20/view?usp=sharing

https://drive.google.com/file/d/1a-ewt9m96vcjAuzgwDSGLAtuRHlMOlH_/view?usp=sharing

this is concerning, because maybe it means banks will start banning cryptos. And what is the point of creating ETFs etc... if then banks do not allow to invest in them?? is it only HSBC doing this?

[Lucius]

Every bank has its own rules when it comes to cryptocurrencies, some explicitly forbid it, others keep it in a gray zone, for others only profit is important and they do not create problems for their clients.

As for HSBC, I’m honestly surprised that they’ve become so careful about where clients ’money comes from and even more where it goes - since a few years ago they laundered money for drug cartels and received loads of money in trucks. The bank that was established as a source of funding for the giant trade of opium into the Chinese markets in the nineteeth century, should no longer even exist if there was law and justice.

My advice is to change the bank, but first send an official letter and find out what is allowed and what is not.

[cheezcarls]

So I already own some crypto but just for the sake of it I tried to buy a tiny portion of BTCC (the canadian bitcoin etf) , or other crypto related instrument, and whenever I try HSBC invest direct (in canada) blocks the order, saying:
"alert! your trade ticket was rejected due to no trades allowed on Virtual Currencies"

here are some snapshot of the message:


https://drive.google.com/file/d/1OPs9DLOvtD7s7ExpUU4vhVSjpgt0dUz4/view?usp=sharing

https://drive.google.com/file/d/1qQSDItkOqJNAvvm3D67kCx3AWqYdim20/view?usp=sharing

https://drive.google.com/file/d/1a-ewt9m96vcjAuzgwDSGLAtuRHlMOlH_/view?usp=sharing

this is concerning, because maybe it means banks will start banning cryptos. And what is the point of creating ETFs etc... if then banks do not allow to invest in them?? is it only HSBC doing this?

Not all banks could ban cryptocurrency-related transactions. Like my friend for example, he sees Bitcoin rising and immediately cashed out his profits to his preferred bank. He thought that the amount would reflect instantly to his bank account, so he went personally to them and inquired. The bank teller asked him of his source of funds, and he said “Bitcoin wallet”. So the bank teller went to the supervisor, and then returned and saying that it is not allowed in their banking rules and he was forced to close his account no matter the purpose.

As for me, I am on a different bank in the Philippines and was very crypto-friendly. They even have their first regulated crypto ATM launched in Makati as well. It’s only a matter of time that either these banks would welcome Bitcoin and cryptocurrencies in open arms, or they would be left behind in the trend.

[Theb]

If you are buying these investments via credit on your bank then it will likely be rejected as a lot of banks previously stated that there is a high risk lending money on crypto related investments which I think is the main reason why your bank is rejecting your purchase. Also with regards to Canada banning cryptocurrencies I doubt it will be because of what you are experiencing. From what I know Canada even had the first recorded Bitcoin ETF which for a country who has negative views with the cryptocurrencies won't even happen. This problem of yours is only limited to the bank's decision and it doesn't involve the legality of Bitcoin in your country.  Just look for other banks that allows loans related to crypto investments.

[Poker Player]

Every bank has its own rules when it comes to cryptocurrencies, some explicitly forbid it, others keep it in a gray zone, for others only profit is important and they do not create problems for their clients.

As for HSBC, I’m honestly surprised that they’ve become so careful about where clients ’money comes from and even more where it goes - since a few years ago they laundered money for drug cartels and received loads of money in trucks. The bank that was established as a source of funding for the giant trade of opium into the Chinese markets in the nineteeth century, should no longer even exist if there was law and justice.

My advice is to change the bank, but first send an official letter and find out what is allowed and what is not.

Man, what they don't want is to be challenged. As they are dedicated to money laundering, they are terrified of cryptocurrencies, because they can take clients away from them, and that is why they try to prevent them from being used, in vain, of course.

[Antonioz]

thanks for all the replies, soo what about if  hypothetically I wanted to do the opposite, I mean cashing out profit from bitcoin, let's say for example someone wants to sell 1 bitcoin and cash it to the bank, would the bank freeze the money if they are not crypto friendly? and would the money be lost in this case or what would happen?

[Lucius]

thanks for all the replies, soo what about if  hypothetically I wanted to do the opposite, I mean cashing out profit from bitcoin, let's say for example someone wants to sell 1 bitcoin and cash it to the bank, would the bank freeze the money if they are not crypto friendly? and would the money be lost in this case or what would happen?

It is quite possible that the bank will freeze the account and ask you to prove the origin of the money, but I do not mean only the money you withdrew into your bank account, but also the origin of the money with which you initially bought BTC. Depending on the country you are in, banks are required to investigate and report any suspicious transaction to the tax office, and in some countries the tax office has 100% insight into the bank accounts of all clients.

Of course, money can be lost (confiscated) if you can't prove its origin and legality, which is why I have already written to you that you need to check the policy of the bank you are doing business with.

Man, what they don't want is to be challenged. As they are dedicated to money laundering, they are terrified of cryptocurrencies, because they can take clients away from them, and that is why they try to prevent them from being used, in vain, of course.

This is one of the possibilities, we know that cash is something that is ideal for money laundering (if you know how to outsmart the system), but cryptocurrencies can also be used for that purpose, although you also need to know how to do it - certainly not by doing transactions in BTC, but in some alts that provide much greater anonymity.

However, in this particular case, it may only be a matter of the bank's local policy because it is an HSBC subsidiary in Canada - which does not mean that they apply this business practice globally.

[jseverson]

Of course, money can be lost (confiscated) if you can't prove its origin and legality, which is why I have already written to you that you need to check the policy of the bank you are doing business with.

Just to be clear, Canadian banks are only legally allowed to seize your money if you owe them. They can at most freeze your account, then make you go through a lengthy process to get it back; the government can seize your money if it has been determined to come from illegal sources though.

That being said, HSBC UK seems to have explicitly banned its customers from depositing crypto earnings into their accounts:

According to The Sunday Times, clients of the British bank will no longer be able to transfer any profits from cryptocurrency transactions into their bank accounts.

I wouldn't be surprised if HSBC Canada has similar rules, so I would recommend you avoid the hassle altogether and simply open a new account with another bank.

[Antonioz]

yeah that makes sense, thanks so much for the info

[Nhazwrath]

thanks for all the replies, soo what about if  hypothetically I wanted to do the opposite, I mean cashing out profit from bitcoin, let's say for example someone wants to sell 1 bitcoin and cash it to the bank, would the bank freeze the money if they are not crypto friendly? and would the money be lost in this case or what would happen?

There is a legal crypto exchange in Canada called Bitbuy.  The Canadian gov has a regulation agency called FINTRAC if the exchange is fintrac compliant then the transactions are accepted by our banks via an etransfer for cashing out.  just remember there are regular transaction rules on top for large amounts moved( 10,000 or more ) will be reported to the RCMP and they (might) follow up with a phone call.   as well as capital gains tax.  which some can be avoided if the etransfer is moved directly in to a TFSA account.   the TFSA of course has its own advantages and limitations.   but I think the BITBUY exchange is the track you are looking for.

[avikz]

Two years back, Canadian government officially allowed banks to deny services to any crypto related activities. So I don't think it's only HSBC, rather you will have similar experiences with any bank within Canada. Even though the government didn't ban cryptocurrency explicitly, but without banking services it's very difficult to convert your cryptos to cash.

https://www.canada.ca/en/financial-consumer-agency/services/payment/digital-currency.html

So try to find a p2p service provider who can settle your trade in cash. That might be a good idea if the amount is small!

[Karartma1]

Very bad news coming from Canada then, they probably want everyone to only use their stupid ETF to buy bitcoin. Personally, I believe some wealthy bitcoiner should create the biggest bank in the world therefore allowing bitcoiners from all over the world to transact freely everywhere without restrictions.
A bank for bitcoiners, how awesome that would be?

[7788bitcoin]

Very bad news coming from Canada then, they probably want everyone to only use their stupid ETF to buy bitcoin. Personally, I believe some wealthy bitcoiner should create the biggest bank in the world therefore allowing bitcoiners from all over the world to transact freely everywhere without restrictions.
A bank for bitcoiners, how awesome that would be?

It is not going to be easy to get a new banking license if you are dealing with cryptocurrency and the headaches are plenty as you will find dubious users as well and if the authorities wants to give you trouble they can very well be a headache and no  one wants to start a business with trouble written all over it  . For the most part we used to see topics like banks going to disappear because of bitcoin and now some have identified that we need to coexist to make things easily.

Once Paypal allows you to withdraw the coins it is going to be a huge market for people who are troubled with these restrictions.

[Theb]

Very bad news coming from Canada then, they probably want everyone to only use their stupid ETF to buy bitcoin. Personally, I believe some wealthy bitcoiner should create the biggest bank in the world therefore allowing bitcoiners from all over the world to transact freely everywhere without restrictions.
A bank for bitcoiners, how awesome that would be?

You make it sound like Canada is similar to India when in fact it is not and I think you have misunderstood his post since even his crypto ETF transaction is blocked by HSBC. Canada I think is not that strict when it comes to crypto regulations and as far as I am aware of when they say they allow banks to deny crypto related transactions it is only in the means of credit related purchases but they don't block deposits from crypto exchanges as proven by several of their own crypto exchanges have bank wire withdrawal options. For me personally like what I have said earlier it is understandable why would a bank deny crypto related purchases as means of investments as there is a credit risk involve in it.

[yhiaali3]

Most banks prohibit dealing with cryptocurrencies, but this does not mean that all banks do this, some banks still accept dealing with cryptocurrencies until now, but each bank has its own policies and laws, and of course this differs from one country to another, but in general all banks are subject to Governments control that prohibit dealing with cryptocurrencies.

[stomachgrowls]

Most banks prohibit dealing with cryptocurrencies, but this does not mean that all banks do this, some banks still accept dealing with cryptocurrencies until now, but each bank has its own policies and laws, and of course this differs from one country to another, but in general all banks are subject to Governments control that prohibit dealing with cryptocurrencies.

Banks does have different views towards cryptocurrency but most like they are really on that negative side knowing that these are very centralized institutions which do regulated by the government.

Take for example on the current situation here on my country where Crypto is still on the neutral phase where government doesnt neither have negative or positive comments about its existence and
so as with banks but they do already have different treatment or takings about it.

I did make out some comparison with 2 major banks on my place where one is fully negative about bitcoin or simply crypto as a whole which your account
could be possibly be closed once they do find out that you are making such transactions.The other one or bank does accept crypto transactions even
though on indirect manner but still a good news for those crypto enthusiast in the country.