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CryptoUK calls on regulators to address de-banking of digital asset firms

The self-regulatory trade association CryptoUK has proposed providing a “white list” of registered firms in the United Kingdom to address banks limiting or banning transactions to crypto companies.

In separate letters to U.K. Economic Secretary Andrew Griffith and members of the Financial Conduct Authority and Payment Systems Regulator dated March 21, CryptoUK said many banks had begun imposing blanket bans on dealing with crypto firms “instead of taking a risk-based and case-by-case approach.” The proposed white list would allow registered crypto companies to conduct transactions with banks freely without limitations or the threat of bans.

“Many of the major UK banks have now put in place bans or restrictions, and we are concerned that other banks and Payment Services Providers (PSP’s) may also soon follow suit,” said CryptoUK. “We believe that government action is now warranted.”

Under the U.K.’s Financial Conduct Authority, crypto services providers in the country must be registered and comply with Anti-Money Laundering regulations. Some U.K. banks, including HSBC Holdings and Nationwide Building Society, have reportedly banned crypto purchases for retail customers using credit cards.

Related: Congress announces March 29 hearing into failures of SVB and Signature Bank

The CryptoUK proposal echoes concerns among digital asset advocacy groups and lawmakers in the United States following the failures of the crypto-friendly Silvergate Bank, Silicon Valley Bank and Signature Bank. The U.S.-based Blockchain Association submitted requests for information from the Federal Deposit Insurance Corporation, the board of governors of the Federal Reserve System and the Office of the Comptroller of the Currency related to the potential “de-banking of crypto firms.”