Portuguese Banks Are Shutting Down Crypto Exchanges, Here Is ‘Why?’

by | Aug 14, 2022 | Market, Market News, News | 0 comments

Portuguese banks have started to shut down the accounts of crypto exchanges. The reason is that they are focusing on avoiding the potential for criminal activity that could take place through those exchanges.

The exchanges are already licensed to operate the activities in Portugal. Commercial banks can do what they aim to do. So when it comes to shutting those accounts, the banks are actively working on it.

Banks That Closed The Crypto Exchanges :

Recently, the largest bank in Portugal, Banco Comercial Português and Banco Santander have closed a Portuguese crypto exchange named CriptoLoja’s accounts. The exchange became unable to hold any capital into those banks and no activities are no longer worked.

Apart from this exchange, the crypto exchanges the banks also closed the Mind the Coin and Luso Digital Assets. The activity of closing exchanges took place over the past year. The banks are taking precautions to avoid potential money laundering and other criminal activities.

Opinions Of Field’s Fellows :

According to Pedro Borges, the CEO of CriptoLoja, for the corporate industries, it is like a nightmare. He thinks, that even a simple payment will be hard if they have a bank account in Portugal. He stated that the nuisance and the measures that the banks are taking are not good for the country.

Furthermore, Ricardo Felipe, the Luso Chief Product Officer shared that last year national bank Caixa Geral de Depósitos was unable to show him any logic as to why the exchange is unable to hold accounts in the bank. He further stated that they know, this is nothing more than a matter of time. He believes they need to pay attention and focus on their efforts regarding banking relationships.

Felipe said the Portugal regulation allows banks to legally accomplish accounts with cryptocurrency exchanges without any input from the regulator.

He also stated, though, they have an anti-money laundering regulation or license from the authority. But that is not something that provides that kind of operation with the banks.

Though Banco Comercial Português and Banco Santander stated that they closed accounts this year for the suspected fraudulent and money laundering activity. 

The chief strategy officer and the founder of Portuguese cryptocurrency exchange Utrust, Nuno Correia said that the company is not affected by banks closing its accounts. He notices the clashes between the regulators and the banking sector.

Strategies Of The Banks With Crypto Exchanges :

The Central Bank of Portugal owns massive expertise along with deep due diligence in businesses. According to him, it embraces innovation quickly. But it is not suitable for the banking sector itself. 

The nation’s central bank, Banco de Portugal regulates the Portuguese banks. The central bank approves licenses to many cryptocurrency companies that are operating in the country. Although the banks are commercially independent, they have the discretion to allow the crypto firms to hold accounts with their banks. The banks can terminate the firms whenever they want.

According to local lawyer João G. Gil Figueira,

Figueira, the banks choose to work with companies that are not concerned over money laundering or tax evasion. 

He also said it is like the banks do not believe in their regulations. It’s just a combination of banks being slow-moving, not prepared, and scared of money laundering.

Conclusion :

However, the current market situation leaves global investors at a huge risk. Money laundering, phishing, and scams became common activities in this virtual market. Several crypto firms have lost a massive amount through criminal activities. Multiple countries brought regulations to the market. Though, few countries successfully managed to force the regulation on the market. Countries like the US and Britain were about to bring the regulation. But till now no limitations are implemented in these countries’ markets.