Business 22 June 2018

Gerald Fenech

‘Unbanked’ Irish crypto companies lament problems with lenders

The situation for Irish cryptocurrency companies does not appear to be too rosy for the moment with several reporting that they either had to halt trading altogether or have been forced to open foreign bank accounts to continue operations, the Irish Times reported. Companies like Bitcove claimed that they had to open an account with a foreign bank to remain afloat after Irish banks have refused their business outright.

Some startups claim to have been “unbanked” by Irish lenders, meaning that financial institutions have withdrawn banking services, while others said they were never given an opportunity to open bank accounts in the country.

Crypto exchange Bitcove, founded by brothers James and Peter Nagle in 2014, said it had accounts with AIB, Permanent TSB and Bank of Ireland—all of which have been shut down. According to Peter Nagle, the banks told them “that they do not support companies offering cryptocurrency exchange facilities despite the fact they had previously given us an account for this purpose.”

The Cork-based startup is particularly angry about the situation mainly due to the fact that it had previously been awarded a ‘best business start-up award’ by the Bank of Ireland. However, many banks around the world are hostile to the cryptocurrency space in general so the Irish bank’s stance comes as no real surprise to seasoned operators in the field.

“We were participants on the Ignite start-up programme, which is backed by the bank. Our business and its progress were reviewed monthly by a panel which included Bank of Ireland representatives. At the end of the incubator Bitcove won the award, but then just a few months later our accounts were frozen and eventually closed,” Nagle said.

The company has since found new banking facilities in Europe with what it called “a more progressive banking partner.”

Eircoin, considered to be one of the “longest running” crypto broker in Ireland, closed in April “due to negligent and defensive banking system,” according to its co-founder Dave Fleming.

Fleming and his business partner, Roisin Coogan, said that aside from Eircoin, a new secondary consulting business was also refused banking services.

In a statement, the Bank of Ireland confirmed it does not provide banking services to virtual currency exchange platforms, although the bank noted that it does not prevent customers from transacting with virtual currency. This is quite strange considering that Ireland is home to several top digital and finance companies such as Apple and Google and is generally positive towards the adoption of blockchain technology.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

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