Tags: banks | accounts | bitcoin | companies

WSJ: Banks Reluctant to Offer Accounts to Bitcoin Companies

By    |   Tuesday, 24 December 2013 07:01 AM

Banks are hesitant to provide accounts to bitcoin-related companies amid worries those companies could be involved with money laundering or other illegal activities, bank executives tell The Wall Street Journal.

Bank regulators across the globe have expressed similar concerns.

"This is definitely causing a bottleneck in the industry," Patrick Murck, general counsel for the Bitcoin Foundation, a trade group, told The Journal.

Editor’s Note:
New Video: Obama Plans to Redistribute Seniors’ Wealth

"The ability of companies to get bank accounts is necessary so that they can take the next step in building out the core bitcoin infrastructure."

The digital currency has received widespread attention in recent weeks, as its usage has increased and its value has fluctuated greatly. It reached $1,147 Dec. 4, but traded at $645 Tuesday morning.

As for the banks, entrepreneur Jesse Powell told The Journal he spoke to about 30 in the last year to start an account for his bitcoin exchange, called Kraken.

"It turned out to be a waste of time because the [banks' regulatory] compliance guys would pull the plug," he said. Powell finally had to turn to a bank in Germany.

But Bank of America froze the account for Kraken's parent company, Payward Inc., last month before unlocking the account once Powell responded to a questionnaire from the bank.

"It was a total nightmare, to put it mildly," he stated.

Companies operating bitcoin exchanges need bank accounts to handle their customers' wire transfers.

Meanwhile, the bitcoin got a feather in its cap last Thursday when online discount retailer Overstock.com said it plans to accept the currency as payment beginning in the second half of next year.

"I've come to understand bitcoin better and decided it's something we do want to be associated with," Overstock CEO Patrick Byrne told MarketWatch.

Editor’s Note: New Video: Obama Plans to Redistribute Seniors’ Wealth

Related Stories:

© 2019 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
Economy
Banks are hesitant to provide accounts to bitcoin-related companies amid worries those companies could be involved with money laundering or other illegal activities, bank executives tell The Wall Street Journal.
banks,accounts,bitcoin,companies
332
2013-01-24
Tuesday, 24 December 2013 07:01 AM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved