Digital currency firms in Ireland denied banking amid EU directive delays

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Digital currency businesses in Ireland are reporting that banks are refusing services, as a result of a delay in transposing a new European Union (EU) directive into Irish law, Irish Times reported.

The claims follow reports that Cork-based digital currency ATM provider Boinnex recent had its bank account with AIB shut down after the bank said the sector was unregulated and digital currency was “not a currency” under Irish law.

According to a letter from the bank informing Boinnex of their decision, the sector was viewed as too risky for the bank: “Entering into a formal relationship with entities carrying out this type of business activity is outside of our risk appetite at this time.”

AIB said its concerns stem from a delay in importing the Fifth Anti-Money Laundering Directive (5AMLD) into domestic law, a process which was due to be completed by January. The imposition was delayed by a general election, and subsequently by negotiations to form a new government based on the result.

Boinnex founder Bryan Tierney was quoted by the news outlet saying the decision has forced the company to choose banking partners outside of Ireland. “We’ve been forced to get a banking partner abroad. A lot of companies in the space are in a similar situation. Some of these foreign banks charge exorbitant fees as they know they’re the only show in town.”

“For our part we have been in touch with the Central Bank since 2018 and paid considerable legal costs to get our anti-money laundering (AML) and Know Your Customer (KYC) requirements in place. The Central Bank advised that we are currently outside of their supervisory framework but applauded the fact that we are self-regulating and being proactive.”

The difficulties experienced by Boinnex come more than two years after digital currency companies first reported banks balking at providing accounts to the sector.

While the legal situation remains uncertain, difficulties in securing basic banking services are expected to drive more digital currency firms to look for banks outside Ireland willing to serve the sector.