73% of British Cryptocurrency Companies are Forced to Open Bank Accounts Abroad

According to a new study, almost three quarters of cryptocurrency companies in the UK are forced to conduct banking operations abroad due to difficulties in opening accounts in the country.

The study was conducted by CryptoUK, a self-regulatory organization whose role is to improve industry standards and interact with the political sphere. The organization, which surveyed more than 40 leading companies in the cryptoactive assets sector in May and June 2019, found that banks often refuse to open accounts for cryptocurrency companies, pushing these firms to search for more benevolent jurisdictions.

55% of the surveyed cryptocurrency companies operating in the UK applied for opening bank accounts domestically, but were refused. In half the cases, they were not given any comments regarding the refusal. 73% of those surveyed said they had opened a bank account in another country, citing as an example more than 15 different jurisdictions, including the United States, Switzerland and several EU countries, a CryptoUK representative told Bitcoin Magazine.

In most of these countries, there are regulatory regimes for cryptocurrency companies, and their governments have made active efforts to simplify business operations in this sector.

“Many firms in the cryptocurrency sector, including members of CryptoUK, want to take the UK as their home, invest in innovation and expand their operations here,” said Iqbal V. Gandham, chairman of CryptoUK, in a public statement. “But, as our survey shows, the often impossible task of opening a bank account forces more and more companies to go to other jurisdictions that often pose great risks to them.”

Although the UK government seeks to preserve the country’s position as the largest fintech center after Brexit, the UK risks facing an outflow of innovations and personnel if banks continue to refuse to conduct business with cryptocurrency companies, notes CryptoUK.

The survey showed that 69% of respondents either moved or are considering leaving the UK because of difficulties opening an account, while 75% of those polled said that they needed access to banking services to expand operations in the UK.

“Banking services are crucial to the prosperity of cryptocurrency companies in the UK,” said a spokesperson for CryptoUK. “Access to banking services will provide greater confidence for businesses and consumers, which will allow the industry to flourish in a safe environment.”

According to CryptoUK, the difficulties that cryptocurrency companies face in the banking sector are largely due to the lack of clarity in the regulation of cryptoactive assets, which forces banks to apply a restrictive approach to working with enterprises in this sector. CryptoUK calls on the government and regulators to pay attention to jurisdictions such as France, which will publish this month
rules supporting cryptocurrency companies in accessing banking services.

“The government has repeatedly declared its desire to make the UK a global center for fintech, and the cryptocurrency industry plays a crucial role in this sector. Currently, the size of the cryptoactives industry has reached 300 billion pounds, ”says CryptoUK. “Britain has the opportunity to become a world leader in a cryptocurrency economy, but if we want the best minds and firms to call Britain their home, the government must support our developing sector through appropriate, proportional and well-thought-out regulation.”