Hong Kong Banks Begin Crypto Business Crackdown

Bitcoin business are being shot down in Hong Kong as many see banks turning away their business. Despite the Monetary Authority insisting that account creation policies are unaffected by those dealing with cryptocoin’s, the South China Morning post reported many business including the Gatecoin exchange which is based in the area, are having their bank accounts completely suspended without warning.

“We’ve been very much in favor of enforcing strict AML best practices; we do a lot of client due diligence and we don’t accept cash or cheques, because we have always wanted to make sure that we can associate every bank transfer coming in and out with the name of the client that has registered with us and we have all their [‘know your customer’ (KYC)] information,” Glucksmann from Gatecoin said.

Gatecoin isn’t the only exchange to be affected as banks clamped down on Bitspark which is another exchange located in the Hong Kong area. Banks’ have protested that no correlation between account rejection and crypto affiliation exists as they simply follow normal regulatory procedures with rejection rates still around the average of 5%.

HSBC branch in HONG KONG
An exterior view of the HSBC headquarters at the financial Central district in Hong Kong November 3, 2015. REUTERS/Bobby Yip

To conclude, bitcoin business may see operations being restricted in Hong Kong as support from banks and fiat institutions is slowly withdrawn. While many banks have avoided questions regarding the affiliation of crypto business with traditional banks, the likes of the HSBC have commented that they have a “very limited appetite for banking virtual currency exchanges”. As it becomes harder to run crypto exchanges and business in Asia with a number of countries including the likes of china cracking down, many are forced to move operations abroad particularly to countries located in Europe which have become considerably more accommodating.

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Hi I'm Aleppo Allesadero a experienced bitcoin user and educator. Having worked for over a year in the bitcoin journalism ive seen bitcoin grow from strength to strength asserting its power against fiat currency. Hopefully you too can learn about this exciting new prospect which may help transform the way we see finance and economy on a daily basis.