Blockchain Events
Portuguese Banks Block Accounts For Cryptocurrency Exchanges
Portuguese banks have canceled the accounts of at least three exchanges despite them having received regulatory license to operate in the nation. What is the cause? Money laundering concerns are a worry for banks.
Portuguese commercial banks are shutting the accounts of cryptocurrency exchanges in order to prevent the possibility of illicit activity through these exchanges.
Furthermore, the banks are virtually free to choose how to close such accounts even if the exchanges are permitted to conduct business in Portugal.
The largest bank in Portugal, Banco Comercial Português, and Banco Santander recently placed restrictions on the accounts of the Portuguese cryptocurrency exchange CriptoLoja (SAN). The exchange is no longer allowed to hold any capital in such organisations.
This discussion is not unusual. Earlier this year, the accounts of the cryptocurrency exchanges Mind the Coin and Luso Digital Assets were also frozen by Portuguese banks.
Due to concerns that these exchanges encourage money laundering and other illicit conduct, Portuguese institutions have started closing accounts with cryptocurrency exchanges during the past year.
It’s a nightmare on the business side. According to Pedro Borges, CEO of CriptoLoja, a simple payment is more challenging than it would be if we had a bank account in Portugal. “These annoying actions that the banks are taking are not good for the country.”
Ricardo Felipe, the chief product officer of Luso, asserted in a recent interview that the national bank Caixa Geral de Depósitos had not provided him with any justification for the exchange’s loss of access to its accounts as of last year. Due to alleged consumer fraud, Banco Santander and Banco Comercial Português both reported cancelling accounts this year. Borges didn’t respond when asked about these specific charges.
“We already anticipated that this was only a matter of time and that we would need to pay attention and focus our efforts on our banking ties,” Felipe said.
Felipe claims that without requesting approval from the authority, Portugal’s regulatory framework empowers banks to formally close out consumer accounts with bitcoin exchanges.
While we do have a regulation or license from them (on anti-money laundering), according to Felipe, “it’s not something that establishes that kind of activity with the banks.
Nuno Correia, the founder and chief strategy officer of the Portuguese cryptocurrency exchange Utrust, said in a recent interview that
that the bank closing their accounts has not harmed the company. He does, however, mention the distinctions between the regulators and the financial sector.
“The Central Bank of Portugal has a wealth of experience, thoroughly investigates enterprises, and supports innovation all at once. According to Correia, not all of the banking sector is impacted in the same way.
the judicial system of Portugal
Portuguese banks are regulated by Banco de Portugal, the country’s national bank. According to local lawyer Joo G. Gil Figueira, the central bank grants licenses to a large number of bitcoin enterprises operating in the country. On the other hand, commercially independent banks are free to choose whether or not to let these enterprises to hold accounts in their institutions and to shut those accounts whenever they see fit.
According to Figueira, banks prefer to work with companies that don’t arouse suspicions about tax fraud or money laundering, two crimes that are allegedly regularly connected to those who lend out and trade digital assets.
“It would seem that banks are not confident in their own regulator’s judgment to grant such operational authorizations.
“So it’s a combination of banks being slow to move, unprepared, afraid of money laundering, and preferring other low-hanging fruits in other areas,” Figueira was quoted as saying in a recent interview.
Felipe expressed optimism that the forthcoming Markets in Crypto Assets bill, which is anticipated to go into force in 2024, will explain how commercial banks and regulators should cooperate despite the fact that Luso is unable to create an account with the Banco de Portugal.
The European Union will have a framework for regulating digital assets, such as stablecoins and initial coin offerings, thanks to the Markets in Crypto Assets bill (MiCA). A universal licensing system will also be established, making it easier for businesses to open up shop across the board in all of the EU’s member states.
“We’ll become financial institutions because of MiCA. We will have the security of being given Portuguese partner bank accounts, Felipe remarked, even if the bank wants to conceal them.
However, Figueira does not think that MiCA will take any measures to prevent banks from closing accounts in Portugal. Instead, it will act as a “passport” that will let bitcoin enterprises operate throughout the continent of Europe.
More so than [anti-money laundering/know your customer legislation], MiCA will have an impact on consumer protection, specifically on the production, issuance, and investment in such assets. According to Figueira, it won’t really have a direct impact on the banking-related issues and elements that we’re discussing.
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