Banks in the United Kingdom are making it difficult for crypto companies to access their services, as they are now requesting more documentation and information on clients transactions, according to a recent Bloomberg report. Crypto firms are experiencing rejected applications, frozen accounts, and overwhelming paperwork. They have even complained to Prime Minister Rishi Sunak’s government as the situation worsened in recent weeks. This move goes against Sunak’s plans to prioritize financial technology disruption and make the UK a global crypto hub.
The few banks still working with crypto firms are requesting additional documentation, including how they monitor clients’ transactions. HSBC Holdings and Nationwide Building Society have already banned cryptocurrency purchases via credit cards for retail customers. Moreover, similar to the US, UK authorities are tightening regulations on crypto companies. In February, the Financial Conduct Authority proposed a set of rules that could subject executives of crypto firms to two years in prison if they do not meet certain conditions related to promotion.
To address banks that limit or ban transactions with crypto companies, the self-regulatory trade association CryptoUK has proposed the creation of a “white list” of registered firms in the country. This list will ensure that UK banks continue to provide services to these registered firms.