Crypto Startups Find UK Banks Won’t Give Them Accounts

Banks across the UK are reportedly shy about servicing the crypto industry, and neither are their fintech alternatives

article-image

Salma Bashir Motiwala/Shutterstock, modified by Blockworks

share

UK crypto startups are struggling to obtain bank accounts, hindering the country’s pursuit to become a global industry hub.

One company, portfolio management firm SavingsBlocks, had sought accounts from nine banking service providers with seven outright denying its requests, Bloomberg reported.

The two more agreeable banks have required additional paperwork — complicating the process — including details of how it screens user transactions. SavingsBlocks is now exploring banking licenses in France.

Other startups have encountered similar roadblocks. Crypto exchange CoinPass said it now uses payment service providers to field deposits and action payments, rather than a traditional bank. 

Binance had relied on London-headquartered Paysafe until it was cut off in March. UK-based users can no longer deposit or withdraw pounds until Binance finds another partner. Blockworks previously reported that banking restrictions had imposed limits on pound deposits to crypto exchanges.

Money transfer platform Wise even locked the account of Nephos Group, an accounting firm that services the crypto industry, for three months, per its founder to Bloomberg. The company now has bank accounts spread across multiple platforms.

A Wise spokesperson told Bloomberg it doesn’t service companies involved in trading or exchanging crypto, and the firm freezes accounts as it investigates them.

All this has weighed on UK startups. Local venture capital investment flows into digital asset businesses experienced a reported 94% drop to $55 million in Q1 this year. Funding across the rest of Europe rose roughly 31%.

Australia also witnessed multiple firms being denied banking access last year. And recent crises at crypto-friendly banks in the US surely haven’t helped.

But before becoming Prime Minister, then Chancellor of the Exchequer Sunak said in April last year: “It’s my ambition to make the UK a global hub for crypto asset technology.”

Now, if only UK banking infrastructure could play ball.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

MON - WED, MARCH 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience:  Attend expert-led panel discussions and fireside chats  Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts   Grow your network […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Frax report cover.jpg

Research

Frax saw continued development in its frxETH liquid staking derivative and Fraxlend money market throughout 2023. Frax V3 introduces an RWA strategy to drive utility to the protocol's cornerstone product, the FRAX stablecoin.

article-image

As of Wednesday, the US government had seized Sinbad’s website

article-image

Cross-chain protocol’s product development-focused unit Wormhole Labs formally launches following $225 million raise

article-image

Accredited and non-accredited investors worldwide will be able to purchase the Note starting Dec. 6 on US-regulated trading platform INX

article-image

Bitcoin’s next halving is less than five months away. History says they’re bullish but will this time be different?

article-image

Merger is set to allow the combined business to “flex between our different lines of business,” Hut 8 CEO says

article-image

Agency’s decision to start comment window earlier than expected could be bullish for spot bitcoin ETF approval in January, industry watchers say