Banks Walk Away from Finnish Cryptocurrency Exchanges
The growing talks to regulate cryptocurrency and related institutions have started showing tangible effects as of late, and the latest news in this regard is about a cryptocurrency exchange in Finland. Finnish cryptocurrency exchanges have been rather quiet lately but there might be more news from Europe as talks for regulation heat up.
Prasos used these accounts to facilitate its cryptocurrency trading between Euros, but four out of the five associated banks which the exchange used have now blocked these accounts.
The news was confirmed by Henry Brade, Prasos’ co-founder and CEO.
These steps were reportedly taken by the banks amongst fears of anonymity that cryptocurrency transactions are often linked with and the money laundering operations that could result from such anonymous transactions.
According to Brade, the banks got wary of the cryptocurrency exchange when its transaction volume rose to around $185 million, a figure that was tenfold of the exchange’s trading volume from the year before.
He mentioned that the international transactions especially held the banks’ interest, but also stated that the exchange had been “given very little information by the banks” regarding what it could do to resolve their concerns.
Brade further stated that Prasos is doing all it can to address these reported concerns with additional measures to show that it values anti-money laundering.
“We’ve created identification practices, which we have taken into use in March, and they comply fully with anti-money laundering laws and regulations, even though authorities do not even require this from us as our business is not under regulatory obligations.” He said.
Why are finnish cryptocurrency exchanges facing this issue?
It was also mentioned that Prasos is not the only cryptocurrency exchange in Finland that is facing these issues, but its counterparts are also facing similar troubles.
While Finland does not have any legislation in place that directs banks in their dealing with cryptocurrency exchanges in the country, anti-money laundering laws always need to be followed by such institutions.
Thus, it is being speculated that these banks are practicing caution against any institutions that could hold them in violation of such rules.
Finnish Cryptocurrency Exchanges aren’t the only ones facing this issue
Across the board in countries like Portugal and a few others, banks have at one point or another started to stop bitcoin transactions and then re opened them. The expressed statements are always the same, they fear money laundering, the aspects of anonymity and more, yet money laundering can happen in various ways, through both traditional and unconventional means. It is understandable that the banks are especially cautious because they want to make sure that they are not in any possibility of stepping into hot water with the regulators. At the same time, if the cryptocurrency exchange is abiding by Know Your Customer and Anti-money laundering laws these moves by banks could be seen as merely disrupting the crypto consumer experience.