blockworks.co
UK crypto startups are struggling to obtain bank accounts, hindering the country’s pursuit to become a global industry hub.
One company, portfolio management firm SavingsBlocks, had sought accounts from nine banking service providers with seven outright denying its requests, Bloomberg reported.
The two more agreeable banks have required additional paperwork — complicating the process — including details of how it screens user transactions. SavingsBlocks is now exploring banking licenses in France.
Other startups have encountered similar roadblocks. Crypto exchange CoinPass said it now uses payment service providers to field deposits and action payments, rather than a traditional bank.
Binance had relied on London-headquartered Paysafe until it was cut off in March. UK-based users can no longer deposit or withdraw pounds until Binance finds another partner. Blockworks previously reported that banking restrictions had imposed limits on pound deposits to crypto exchanges.
Money transfer platform Wise even locked the account of Nephos Group, an accounting firm that services the crypto industry, for three months, per its founder to Bloomberg. The company now has bank accounts spread across multiple platforms.
A Wise spokesperson told Bloomberg it doesn’t service companies involved in trading or exchanging crypto, and the firm freezes accounts as it investigates them.
All this has weighed on UK startups. Local venture capital investment flows into digital asset businesses experienced a reported 94% drop to $55 million in Q1 this year. Funding across the rest of Europe rose roughly 31%.
Australia also witnessed multiple firms being denied banking access last year. And recent crises at crypto-friendly banks in the US surely haven’t helped.
But before becoming Prime Minister, then Chancellor of the Exchequer Sunak said in April last year: “It’s my ambition to make the UK a global hub for crypto asset technology.”
Now, if only the UK banking infrastructure could play ball.