- SavingBlocks, which applied with nine different U.K. banks for a corporate account, had its application rejected by seven of them.
- U.K. crypto executives are facing problems including frozen accounts, overwhelming paperwork, and application rejections, among others
The crypto sector has never had a good history with the traditional banking system, and a latest report’s revelations only cement this bitter relationship.
The latest Bloomberg report reveals that several U.K. banks are shying away from crypto and digital asset clients.
The reports state that crypto companies are facing application rejections from U.K. banks. For example, digital asset firm SavingBlocks, which applied with nine different UK banking service providers for a corporate account, had its application rejected by seven of them.
“There aren’t many options available – most traditional banks won’t offer banking services to crypto firms,” stated Edouard Daunizeau’s-SavingBlocks founder in an interview. “With the recent string of events, it will be even tougher. We are seeking licenses in France, where we think it will be easier.”
Uk crypto executives interviewed by Bloomberg claims to face a plethora of difficulties, including frozen accounts and overwhelming paperwork. Reportedly, access to banking has worsened to the point that several digital asset companies have complained directly to UK PM Rishi Sunak’s government.
Earlier this year, UK Banks Nationwide Building Society and HSBC Holdings Plc announced limits on crypto purchases with their cards, making it extremely difficult for crypto firms to conduct their operations.
Uk banks’ reluctance to engage with crypto clients is directly in contrast with Rishi Sunak’s approach to building the U.K. as a prominent crypto hub.
“The U.K. banking reaction has been more acute than the E.U. one,” Tom Duff-Gordon, vice president(VP) of international policy at Coinbase, told Bloomberg. He added that European Union’s(EU) efforts to establish a framework for digital assets are making banks more receptive to crypto companies in other countries.
According to PitchBook data, Venture capital investment flowing into U.K. digital-asset companies slumped 94% from a year earlier to $55 million in the first quarter.
The closure of Silvergate and Signature Bank-both prominent crypto-friendly banks, might have likely influenced U.K. banks to take a more cautious approach towards crypto clients.
Moreover, the fall of FTX, coupled with the bankruptcy announcement of several crypto exchanges like Celsius and Voyager Digital in recent months, has made traditional banking systems more skeptical about the crypto sector, which is evident from how U.K. banks are now treating crypto clients.