Hong Kong legacy banking outlets are generating it challenging, if not impossible, for bitcoin-connected companies to run smoothly. Reports from the Chinese area contain denial of accounts, freezing existing accounts, and long waits for approval — all without explicit reason.
“We had just tripled our consumer base in a two to three month period,” explains Gatecoin’s Thomas Glucksmann, “the price tag of bitcoin was rallying, the amount of money clients had been depositing was increasing – the timing couldn’t have been worse.”
He’s speaking of a sudden, abrupt move this Fall by Hang Seng Bank. Gatecoin’s account would be suspended.
Gatecoin is a cryptocurrency for fiat exchange based in Hong Kong.
“It was a main disruption to our company,” Mr. Glucksmann recounts.
“Hong Kong’s bitcoin entrepreneurs say they have been forced to open bank accounts overseas to operate their companies,” the post continues, “after nearby banks froze or closed their accounts.”
Fubon Bank, Gatecoin’s other account, then limited everyday transaction amounts, which meant basically shutting it down.
The rub of course is bitcoin’s reason for getting: customers are their own banks. As reality is now, nonetheless, most individuals hold some type of fiat currency, so to be able to switchover or invest, they need to rely, at least initially, upon legacy banking.
Bankers all more than the planet have openly worried about bitcoin’s ability to flout anti-money laundering (AML) and strict know-your-customer (KYC) regulations. Businesses in the ecosystem are quite conscious of these requirements. “We have often wanted to make certain that we can associate each and every bank transfer coming in and out with the name of the client that has registered with us and we have all their [KYC] details,” Mr. Glucksmann assured.
In turn, Gatecoin had to suspend their clients’ transfers.
Bitspark, a Hong Kong-based remittance business, also had trouble with bank accounts. Founder George Harrap emphasized, “Banking is a prized commodity in the bitcoin space.” Like other bitcoiners in Hong Kong, they’ve had to turn to Europe for relief.
“The couple of that do have bank accounts are trying to be as cautious as achievable,” Hong Kong Bitcoin Association president Leo Weese said. “But ironically by getting cautious they also raise red flags with banks. There’s fairly significantly no way about that minefield without having eventually possessing the account shut down.”
Bitcoiners in Hong Kong think the city has grow to be openly hostile to the world’s most well-liked cryptocurrency, and that the region’s reputation for getting enterprise-friendly is at stake.
The Hong Kong Monetary Authority “dismissed claims that a high number of companies failed to open bank accounts,” the write-up insists. “A spokesman said that the average account opening rejection rate was under five % per month.”
Do you think Hong Kong’s moves will lessen its enterprise reputation? Inform us in the comments under!
Pictures courtesy of: Pixabay, Nasa Observatory, Gatecoin.
Published at Sun, 19 Nov 2017 14:50:22 +0000