It has been a challenging period for Irish crypto entrepreneurs as numerous reports have surfaced, claiming Irish banks are denying financial services to crypto-related businesses. As a result, crypto companies are left with little options – either shut down their operations or open accounts with banks abroad.
Dave Fleming, founder of a now-defunct BTC brokerage Eircoin, placed blame on the Banking and Payments Federation of Ireland (BPFI), saying regulators are “seeking to muddy the waters with insinuations of dirty money.”
Mr. Fleming also said that Irish banks are “negligent and defensive”, as the financial stalwarts of the country also refused banking services to his new crypto consulting business. He claimed the closure of his brokerage clearly crosses the policy of IDA Ireland, which is a state-sponsored agency, tasked with attracting foreign investment to the country and has recently launched an initiative promoting blockchain development.
Fleming quite rightly states that prosecuting illicit activities, associated with cryptocurrencies is beyond the realm of banks and financial institutions, as, according to him, “If any of the Bitcoin sellers in Ireland were involved in terrorist financing I’m sure it wouldn’t be a bank discussing it with us, it would be the law.“
Another affected company, Bitcove, was even awarded a “best business startup” award, sponsored by none other than Bank of Ireland. Nonetheless, it is now being forced out of business by the very same actors that encouraged the company just a short while ago.
Peter Nagle, co-founder of Bitcove told that, “The reasons cited have been that they do not support companies offering cryptocurrency exchange facilities despite the fact they had previously given us an account for this purpose.“
He also went on to add that, “Particularly disappointing was Bank of Ireland. […]Our business and its progress were reviewed monthly by a panel which included Bank of Ireland representatives… Bitcove won the award, but then just a few months later our accounts were frozen and eventually closed.”
Luckily, the company managed to stay afloat and has since found new banking partners in continental Europe, however other companies, such as Eircoin, have not been as fortunate.
In response to such allegations, the Bank of Ireland confirmed that it does not provide services to digital currency exchanges. However, the country’s biggest bank also claimed it does not prohibit any of its clients to participate in the crypto market.
Other institutionals have jumped into an even more defensive stance as AIB bank stated that, “We don’t discriminate in relation to providing banking services to cryptocurrency companies nor have we been systematically exiting such companies.“
When asked about reasons behind the closure of the said businesses accounts, the bank suggested it was likely due to the fact they have failed to comply with all know-your-customer (KYC) and anti-money laundering (AML) regulations.
The situation seems familiar as similar closures have already happened in Chile and India in recent times. In these countries, crypto-associated businesses responded to such moves with legal action against the banks but in Ireland‘s case this might not be necessary, as there are plenty banks all over Europe, who welcome crypto companies.
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I have been following the crypto markets since mid 2017, just in time to witness the incredible surge of the digital asset industry. Fascinated by the potential of blockchain technology I’ve started to dig deeper and that’s how I ended up meeting the Toshi Times team. I hold a Political Science degree, therefore the crypto regulation development is particularly interesting for me. I’m also heavily involved with music, running my own label, a YouTube channel and working with distribution. People call blockchain the ‘Fourth Industrial Revolution’ and I believe it will change our daily lives in the coming years and we will have the front row seats to witness it.