Cryptocurrency Companies Still Have Problems Opening Bank Accounts

Problems Opening Bank Accounts

Cryptocurrency Companies Still Have Problems Opening Bank Accounts

Problems Opening Bank Accounts

Bloomberg reported that companies in the cryptocurrency industry still have problems opening bank accounts.

It cites the report of the CEO of quantitative crypto trading company Alameda Research, Sam Bankman-Fried, , that “the standard answer of ‘just go to your local Chase branch’ doesn’t work in crypto.” Bankman-Fried also added that it is not illegal for banks to serve crypto businesses, but “it’s a massive compliance headache that they don’t want to put the resources in to solve.’’

Bloomberg went on to report that while the larger banks avoid serving companies involved in crypto, smaller ones are trying to get hold of this subset of the market. Such an example given in the report is Silvergate Bank in San Diego, which reportedly said in a November 2018 filing for an initial public offering that crypto businesses have as much as $40 billion to deposit.

Blockchain investment, trading and advisory firm NKB Group is an example given by Bloomberg of a company that has struggled to establish banking relationships. NKB’s head of brokerage, Ben Sebley, said:

“Denying basic banking is madness, impedes sector growth and forces companies to get creative to solve the problem […] The banks are being overly prudent.”

Also blockchain companies in Malta are purportedly also struggling with opening bank accounts.

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