From friendly to hostile: what explains the crisis between banks and crypto exchanges in Portugal

Portugal’s largest bank, Banco Comercial Português, and Banco Santander (SANB11) last week closed the accounts of the Portuguese stock exchange CriptoLoja, acquired at the beginning of the year by the Brazilian 2TM, controller of the Bitcoin Market. Now the company is no longer allowed to deposit money in these banks.

But, she is not alone. At the start of the year, the Exchanges Mind the Coin and Luso Digital Assets also had their accounts closed by Portuguese banks. The decision to close the accounts has been in the works since last year, with the banks citing concerns about money laundering and other criminal activity.

“On the business side, it’s a nightmare. A simple payment is not as easy as if we had a bank account here in Portugal,” said Pedro Borges, CEO of CriptoLoja. “This kind of annoyance and the actions the banks are taking are not good for the country.”

For CoinDesk, Luso Chief Product Officer Ricardo Felipe said last year national bank Caixa Geral de Depósitos gave him no reason why the exchange could no longer maintain bank accounts.

Banco Comercial Português and Banco Santander said they closed accounts this year on suspicion of fraudulent customers. CriptoLoja’s Borges did not respond to questions about these specific claims.

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“We already knew it was only a matter of time and that we had to be vigilant and focus our efforts on our banking relationships,” said Felipe, from Luso. He says the regulatory environment in Portugal allows banks to legally close accounts with money changers. cryptocurrencies without any intervention from the regulator.

“Even though we have a settlement [antilavagem de dinheiro] or their license, it is not something that establishes this type of operation with banks,” he said.

Nuno Correia, chief strategy officer and founder of Portuguese exchange Utrust, told CoinDesk that the company was unaffected by the closure of bank accounts. However, he sees the differences between regulators and the banking industry.

“The Central Bank of Portugal has in-depth expertise, makes a deep due diligence [diligência prévia] in business while embracing innovation. [Não é] the same case for the banking sector itself,” Correia said.

Portuguese regulations

Portuguese banks are regulated by Banco de Portugal, the country’s central bank. According to local lawyer João G. Gil Figueira, the institution licenses several cryptocurrency companies that operate there. However, commercially independent banks may, at their discretion, allow these companies to maintain accounts with their banks and may also close them at their discretion.

Figueira told CoinDesk that banks prefer to work with companies that may not raise issues of money laundering or tax evasion, two crimes considered closely associated with digital asset lenders and brokers.

“It appears that banks do not rely on the judgment of their own regulator when issuing such authorizations to operate. So it’s a mixture of slow and unprepared banks who are afraid of money laundering and who prefer other easy fruits in other sectors,” he said.

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Although Exchange Luso cannot maintain an account with Banco de Portugal, Felipe expressed optimism that the upcoming European Union Cryptocurrency Markets Bill, which will come into force in 2024, will bring regulatory clarity on the relationship between commercial banks and regulators.

The Markets in Crypto Assets Act (MiCA) will provide a regulatory framework for the regulation of digital assets, stablecoins to initial parts offerings across the European Union. It will also create a common licensing regime, allowing businesses to easily establish themselves in each of the bloc’s member countries.

“With MiCA, we will transform ourselves into financial institutions. We will have this guarantee of having partner bank accounts in Portugal, even if the bank wants to hide them,” Felipe said.

However, Figueira does not feel that MiCA will do anything to prevent banks from closing accounts in Portugal. Instead, it will serve as a “passport” for cryptocurrency companies to operate between European nations.

“MiCA will have no impact with respect to [anti-lavagem de dinheiro/conheça as regras do seu cliente], as much as it will have an impact on consumer protection, and more so on the creation, issuance and investment in these assets. It will not have as much direct impact on the banking aspects and issues that we are discussing,” Figueira said.

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