The move of financial institutions in Portugal could drastically harm the crypto ecosystem in the region.
Portugal is known to be one among the most favorable locations for crypto to evolve. However, many believe this phenomenon is soon to change given the banks in Portugal are closing the crypto asset exchange accounts. The crypto exchanges are allowed to open and keep their accounts in the banks, but the banks have the right to shut these accounts whenever they want.
Actions Led to Closing Exchanges’ Bank Accounts
Last week Banco Commercial Portugues and Banco Santander reportedly closed crypto exchange accounts belonging to CriptoLoja. After this, the exchange will not be permitted to keep its capital inside the banks. It’s noteworthy that Banco Comercial Portugues is the largest bank in Portugal.
The country has seen several similar instances earlier as well. Portuguese banks also closed the accounts of Mind the Coin and Luso Digital Assets like crypto exchanges earlier this year. Trend of shutting down the crypto exchange accounts by Portuguese banks started last year, reports said. Concerns of crypto exchanges’ involvement in money laundering and similar criminal activities led the banks to take such initiatives.
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Concerns Around Effect of Banks’ Actions
Portuguese banks’ such moves triggered many reactions around the crypto space in the region. CriptoLoja CEO – Pedro Borges – said it was a nightmare from the corporate side. Such measures of the banks full of inconvenience and difficulties would not end up doing any good for the country’s economy, he added.
Chief Product Officer at Luso Digital Assets – Ricardo Felipe – while citing the last year’s instance said that even after asking for reason, Caixa Geral de Depósitos – Portuguese national bank – did not tell him the motive behind not allowing crypto exchanges to keep tier accounts within the bank.
Felipe added that Banco Commercial Portugues and Banco Santander cited the suspicion of fraudulent clients as the reason for closing the accounts. He said that they knew already that sooner or later they would need to take their efforts towards their banking relationships into account.
Source: https://www.thecoinrepublic.com/2022/08/08/portuguese-banks-closing-crypto-exchange-accounts/