- Major banks closing doors for crypto companies to gain access to banking services
- The adverse effects of crypto security concerns are a significant factor for banking institutions not embracing crypto
- Crypto experts don’t agree with the banks’ initiative measures of closing the doors for the crypto companies
On March 4, 2019, the American Banker reported that several cryptocurrency companies have complained of not acquiring basic banking services from mainstream “gatekeepers” such as JPMorgan Chase and HSBC.
Most banks have shunned crypto companies who have been gaining investors and entrepreneurs in the cryptocurrency coming from New York to Hong Kong and even Singapore’s sovereign wealth fund institutions that are worth multibillion-dollars.
Crypto Similar to Cannabis Industry
The chief authorities in charge of the core sector (banks) of the financial systems have shut down the doors for crypto companies to access their services. As reported on Feb 14 by BlockchainReporter, JP Morgan, one of the largest American multinational bank and financial services companies announced that they are rolling out the prototype of cryptocurrency coin by an American banking giant.
However, most people in the crypto community see such move as a “ticking time bomb” of crypto regulations that is similar to the federal situation prohibiting reputable banks in the US to accept funding functions from marijuana and cannabis industry.
Robby Houben, a lawyer, and professor at the University of Antwerp reiterated that no bank is willing to help the crypto companies. Robby who is one of the authors who addressed the European Parliament with a research paper entailing the financial crimes involved in cryptocurrencies went on and said;
“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.”
Security Concerns Remain an Issue
Putting into considerations when crypto has been linked to illegal activities like hacking attempts of 2016 presidential campaign in the US and the increasing fraud cases, adoption of digital assets has only gotten far-fetched with every bad new incident undermining the legitimacy of cryptocurrency.
The chief executive officer of Alameda Research (in Berkeley, Calif), Sam Bankman-Fried, said that the standard answer of ‘just go to your local Chase branch’ wouldn’t work in the crypto industry.
“It’s not illegal for big banks to bank the crypto industry, but it’s a massive compliance headache that they don’t want to put the resources in to solve,” Sam Bankman-Fried said.