UK Crypto Companies Struggle to Access Banking Services Amidst Rejected Applications and Stringent Documentation Requirements
Cryptocurrency companies in the United Kingdom are facing mounting difficulties in gaining access to banking services, with only a few institutions continuing to work with them. According to Bloomberg, crypto firms are being requested to provide additional documentation and details on how they monitor client transactions, resulting in rejected applications, locked accounts, and a deluge of paperwork.
This situation has become so problematic that some crypto companies have lodged complaints with the government, including Prime Minister Rishi Sunak’s office. This is in contrast to Sunak’s goal of making the UK a hub for cryptocurrency and financial technology disruption.
Tom Duff-Gordon, Vice President of International Policy at Coinbase, believes that the banking industry has been quicker to react than the EU, which has resulted in other nations being more receptive to crypto firms. The Markets in Crypto Assets (MiCA) legislation was ratified by the European parliamentary committee in October, almost two years after it was first introduced in September 2020, with the vote to conclude this month.
Data from PitchBook indicates that venture capital investments in UK digital asset firms have declined by 94% to $55 million in 2023, compared to a 31% increase in other European countries. To continue operating in the UK, crypto companies are utilizing payment service providers such as BCB Payments and Stripe.
The UK trade association, CryptoUK, has proposed the creation of a “white list” of registered firms in response to banks restricting or prohibiting transactions with cryptocurrency firms. This would provide clarity and support for companies struggling to access banking services.
In conclusion, the difficulties faced by UK crypto companies highlight the need for a more supportive regulatory environment that encourages innovation and investment in the cryptocurrency sector. Without access to banking services, crypto firms will struggle to grow and compete with their European counterparts.
