Tag: De-Banking

Blockchain Association Seeks Information on De-banking of Crypto Companies

by Blockchain News

The Blockchain Association, a cryptocurrency advocacy group, has filed additional Freedom of Information Law (FOIL) requests to regulators in the US. The group had initially filed for information from the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, and the Office of the Comptroller of the Currency. The new requests were submitted to the Federal Housing Finance Agency and the New York Department of Financial Services, seeking further information on the de-banking of crypto-friendly banks.

The organization is interested in learning more about the de-banking of cryptocurrency companies after the closure of Signature Bank and the failure of Silvergate Bank. These two banks were known for their friendly stance towards cryptocurrency-related businesses, but both were closed down, leaving many companies in the crypto industry without a banking partner.

The Blockchain Association believes that these closures were a result of regulatory pressure, and that the lack of transparency around the issue is problematic for the industry. By filing these FOIL requests, the group hopes to shed more light on the situation and ensure that the regulatory process is fair and transparent.

The de-banking of crypto companies has been a contentious issue for some time. Many banks are hesitant to work with companies in the industry due to concerns around money laundering and other illegal activities. However, for companies in the crypto space, having a banking partner is essential for conducting day-to-day business operations.

The closure of Signature Bank and Silvergate Bank has highlighted the fragility of the relationship between banks and cryptocurrency companies. The Blockchain Association is seeking to understand what led to the closures and whether there was any unfair regulatory pressure involved.

This is not the first time that the Blockchain Association has filed FOIL requests to obtain information about the regulation of cryptocurrency-related businesses. The group has been a vocal advocate for the industry and has worked to ensure that regulators take a fair and balanced approach to the sector.

As the crypto industry continues to grow, it is likely that we will see more regulation and scrutiny from regulators. The actions of the Blockchain Association demonstrate the importance of transparency and accountability in this process, and highlight the challenges faced by companies operating in this space. By working together with regulators, the industry can ensure that it continues to thrive and innovate, while also addressing legitimate concerns around security and illegal activity.

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Crypto Advocacy Group Calls on Regulators to Address De-Banking of Crypto Firms

by Blockchain News

The recent failures of banks providing services to crypto firms in the United States have raised concerns in the crypto community about a perceived “de-banking” of the industry. In response, the Blockchain Association has called on financial regulators to provide information about their actions in relation to the banks’ failures. The association has submitted Freedom of Information Act requests to the Federal Deposit Insurance Corporation, the board of governors of the Federal Reserve System, and the Office of the Comptroller of the Currency, seeking documents and communications that could potentially show if regulators’ actions “improperly contributed” to the banks’ collapse.

The Blockchain Association believes that crypto firms should be treated like any other law-abiding business in the U.S. and given access to bank accounts. The association is investigating allegations of account closures and refusals to open new accounts by banks against crypto firms, which it believes are part of a wider trend of de-banking the industry.

The recent banking crisis in the crypto industry began with the announcement by Silvergate’s parent company on March 8 that it would “wind down operations” for the crypto bank. This was followed by Silicon Valley Bank’s own failure after a run on deposits on March 10, and the closure of Signature Bank on March 12 by regulators. Some in the crypto community believe that federal regulators’ perceived attack on banks servicing crypto firms could force companies to turn to “shadier” options.

Prior to its closure, Signature Bank was considered a major crypto-friendly bank in the U.S., providing services to Coinbase, Paxos Trust, BitGo, and Celsius. The FDIC’s resolution handbook states that an acquirer tells the FDIC what assets and liabilities from the failed bank it is willing to take, as well as what (if any) money will change hands.

Former U.S. Representative and Signature board member Barney Frank reportedly claimed the FDIC was sending a “strong anti-crypto message” in shutting down the bank, and some lawmakers are demanding answers. The recent actions by regulators have prompted concerns in the crypto community about the potential for a wider crackdown on the industry by regulators. The Blockchain Association’s calls for transparency from financial regulators are part of wider efforts to ensure that crypto firms are treated fairly and given access to banking services like any other business.

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Commonwealth Bank to enable crypto trading for 6.5M Aussies, ‘other banks will follow’

by Cointelegraph

The Commonwealth Bank of Australia (CBA) is set to launch crypto trading services for the 6.5 million users of its CommBank app.

The CBA will become the first bank in Australia to support crypto, and Blockchain Australia says it is “inevitable” that the other ‘big four’ banks including National Australia Bank (NAB), Australia and New Zealand Banking Group (ANZ) and Westpac will soon follow suit.

According to a Nov. 3 announcement, the CBA has partnered with the Gemini crypto exchange and blockchain analysis firm Chainalysis to launch its crypto services. The bank will launch a pilot for a limited number of customers in the coming weeks, before rolling out the full service in 2022.

Ten crypto assets will be supported in its banking app, with Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH) and Litecoin (LTC) named at this stage.

Steve Vallas, CEO of Blockchain Australia told Cointelegraph that this move was “extraordinarily important” as the big four banks in Australia “underpin our national and international reputation as a financial services destination.”

“The confidence that this provides local digital asset sector participants will be dwarfed by the impact that this signal sends around the world that Australia should be a destination for cryptocurrency and digital asset adoption.”

Vallas believes the rapid growth and adoption of crypto has “shifted the risk of maintaining a wait and see approach” in the view of the big banks to a risk of “inaction” and being left behind. Vallas believes it is only a matter of time before the other major Australian banks launch their own crypto services.

“It is inevitable that the other banks will follow suit. Clarity in the local regulatory landscape is emerging with issues such as licensing being tackled head on by industry and by Governments. That impediments to action and participation are being removed,” he said.

Caroline Bowler, the CEO of local crypto exchange BTC Markets echoed similar sentiments to Vallas, noting that “with regulation in the offing and the largest bank in the country allowing it, the floodgates are now open for more appetite from traditional finance.”

“CBA’s move is exciting and inevitable. It’s yet another ‘red-letter day’ for crypto and it is as though Australia has suddenly put the lead foot down. We have been touted as playing catch up all this while, but now we’re moving into a leadership position globally with our largest bank.”

Dave Abner, the Global Head of Business Development at Gemini said that his firm was “proud” to be working with CBA to launch world leading crypto services.

“The exponential growth of digital assets internationally, coupled with Gemini’s institutional-grade security and proactive regulatory approach, positions this partnership to set a new standard for banks and financial platforms in Australia and across the globe,” he said.

Related: Australian Senators pushing for country to become the next crypto hub

Cointelegraph reported on Oct. 15 that Allan Flynn, a Canberra-based Bitcoin trade settled his first complaint at the ACT Civil and Administrative Tribunal against ANZ for de-banking him in 2018 and 2019 due to his occupation as a Digital Currency Exchange (DCE).

While ANZ denied any liability, the bank offered him a chance to reapply for a bank account, suggesting that the bank is more open to crypto than it was two to three years ago. Flynn also has a similar case against Westpac ongoing.

Commenting on today’s news, Flynn told Cointelegraph that the crypto landscape in Australia is rapidly changing:

“There a lot of things suddenly happening in the Australian Bitcoin space; you have the Senate inquiry, ANZ’s acknowledgment of a legit human rights question to be answered in my complaint, AUSTRAC’s extraordinary statement on de-banking last Friday and now CBA’s digital currency plans being unveiled.”

“I’m just here arguing my lawful human rights and hoping it makes a difference,” he added.