In the collective imagination of companies dedicated to issues related to Bitcoin, or cryptocurrencies in general, is long-established fear of cutting the way between Bitcoin and fiduciary money ie the cancellation of their accounts linked to the exchange or ultimately to your business or individual identity. In most cases, account closures are few and far between. In the case of several companies based in Hong Kong, however, things have gotten worse. In fact, many companies have been forced to look for alternative banking services or banking partners abroad.
There is no objective reason for any bank in the world to close accounts belonging to Bitcoin users or service providers. While it is true that some people can use these platforms for illicit purposes, the vast majority of companies have nothing but honest intentions. If those companies are put aside by banks around the world, things will deteriorate pretty quickly. And that is what is happening in Hong Kong at this time.
The South China Morning Post reports that several entrepreneurs and companies based in Hong Kong have been forced to open bank accounts abroad. Operating a Bitcoin business often involves having a bank account, or multiple accounts, to provide liquidity in fiat currency. The banks in Hong Kong, whose identity is not mentioned in the report, have allegedly begun to close the bank accounts of certain companies for their associations with cryptocurrencies. If confirmed this rumor would be a sudden and unexpected turn of events.
While Hong Kong is considered a global center for Fintech, things are very different when it comes to Bitcoin and cryptocurrencies. In fact, Gatecoin, one of the largest exchanges of cryptocurrencies in Hong Kong, is one of the victims of the sudden change of direction of local banks. A representative of his partner bank informed the company that his account had been suspended for no reason. Although this incident happened two months ago, it was only the first of multiple entities that suffered a similar fate. Compressibly this is a situation an untenable situation.
In fact, Gatecoin’s problems have continued. The bank partner of Gatecoin decided to impose more stringent transaction limits on the account for no apparent reason. Other companies active in the city have had similar experiences, however, no one has received a valid explanation about what is behind all this. None of the interested banks is willing to comment on this situation since it is clear that you should not play with whoever is behind this repression. Fortunately, most of the companies affected since then have successfully established new accounts in other parts of the world.
It is understandable that Hong Kong banks adhere to the strict anti-money laundering regulations of the countries in which they are located. So do the companies that deal with Bitcoin that make use of these bank accounts. It seems that many institutions do not want to associate with cryptocurrencies at this time in Hong Kong. That is strange, given the increase in the popularity of these currencies in recent months. There does not have to be a schism between banking and Bitcoin, but banks are more than eager to create that gap. It is a strange approach, but it can also be extended to other countries in the world.
It is not clear how all this will unfold in Hong Kong in the coming months. There is no indication as to which banks are or are not against Bitcoin and cryptocurrencies at this time. That said, it is not acceptable that problems arise for fintech companies in general. Any company looking for an international banking partner will have their work cut out for them as well. Apart from Switzerland and some other countries, there are not too many places where such restrictions are not emerging or are expected to manifest themselves in the coming years.
Economy fan, hangued, hooked on crytocurrencies and junkie of audiovisual stuff…on rehab