This is a growing challenge, that’s unfortunately just getting worse.
We are going to discuss what can be done when it comes to banking and cryptocurrencies.
There are three ways that you can interpret the subject of banking for crypto. First, there are people who have a crypto business. This is a very common inquiry that we get.
Lots of questions come from people who created a crypto exchange, and now have problems with banking. This is not easy.
Many of them have heard that Malta is accepting crypto, however, the question of banking still remains. It is very hard to bank in Malta, so this will not solve your solution.
Second, there are situations where people want to send money to crypto exchanges and buy crypto.
This is the easiest situation.
The third one is when you want to receive money from a crypto exchange.
This is a common problem in our experience. Banks would often block the transfer and even shut down your account.
Why are banks afraid of Crypto?
Banks are quite concerned about tax avoidance, money laundering, terrorist financing- proceeds of crime.
HSBC got fined 9 billion dollars, and lots of other banks have been fined big amounts as well.
Governments come to banks and say- if you’re helping facilitate all those illegal activities, we are going to come hard on you.
In my opinion, this is too strict, because governments pushed too much of responsibility and consequences on banks.
This created a lot of fear.
Banks have to answer questions such as: where does this money come from, is this proceeds of crime? Are some criminals sending this money? etc.
If you are receiving money from a crypto exchange they don’t know where that money is coming from.
If you are a very valuable client, that has lots of money under wealth management banks will be more willing to look into your situation and understand what’s going on.
Also, banks will be more open if money is coming from better-regulated exchanges such as Coin Base.
It would be much better if banks would understand crypto businesses better. But they don’t have much incentive to do so.
Consequences are brutal, and the upside from them is not really high. They don’t get that much value from any particular client, so they simply don’t want to risk.
Where to go if your business is dealing with Crypto?
For the most part, you can forget about Europe.
They made is very hard for these types of businesses. This goes for the EU as well as non-EU members. This means you can forget about Montenegro, Macedonia, Georgia (it used to be quite good for banking, but not anymore).
UAE is not an option, either.
You can bank to some extent in Canada and the USA. There are some reasonable options.
Singapore is a place where you can still do it, even though it’s getting harder especially if you’re a crypto business.
A similar situation is in Hong Kong.
This, unfortunately, leaves us with some high-risk banks.
There are two categories here: offshore banks and EMIs.
Some of them will be okay dealing with Crypto.
If you are having problems with banking contact us and we’ll do our best to help you. It is not easy, but it’s doable.