Reversal of Portuguese banks closing crypto platform accounts

Change of course for the European crypto Eldorado. Several banks in Portugal, including major players such as Banco Santander, have reviewed their stances by arbitrarily closing accounts on several duly registered exchange platforms.

Portuguese banks turn hostile to crypto

Portugal, crypto paradise? We will revise this assessment in light of recent events shaking the Lusitanian ecosystem. Yes, seized by a somewhat improbable change of mood, several banks in the country, including the heavyweights Banco Comercial Portuguès and Banco Santander which just last week announced that it is preparing a crypto offering for its Brazilian clientele, already started in 2021, to close accounts belonging to local exchange platforms.

A mildly surprising initiative when we know that at least three of the affected stock exchanges – CriptoLoja, Mind the Coin and Luso Digital Assets – had obtained regulatory approval to operate in the country. But despite a favorable positioning of the regulator, in this case in Portugal, the central bank, commercially independent banks are as free to grant these companies permission to have accounts as to terminate them as they see fit.

The decision to open or continue to offer bank account services in this case depends on the risk management policies that each financial institution puts in place.

Mario Centenogovernor of Portugal’s central bank, in the medium Expresso

In fact, it seems that their decision was motivated by the fact that, from their point of view and in accordance with the prevailing prejudices, exchanges crypto would facilitate criminal activities like money laundering.

Regardless of whether they have identified fraudulent transactions or not, it is certain that the tighter European regulatory context has a lot to do with it, and that banks expect the adoption of MiCA, which will constitute a strict framework for the EC industry, especially with regard to anti-money laundering rules and combating the financing of terrorism. Controversial, questionable and even counterproductive regulations that will not necessarily resolve the tortuous relations between banks and crypto players that other countries such as France are also experiencing. Rather, it appears, as lawyer João G. Gil Figueira told Coindesk, that these institutions err on the side of caution and prefer to partner with companies with a less sulphurous reputation.

It seems that the banks do not trust their own regulator’s assessment of the issuance of such operating permits. So it’s a mix of slow, unprepared banks fearing money laundering and preferring other low-hanging fruit in other sectors.

Gear change in Portugal

Meanwhile, crypto companies find themselves in trouble.

In the absence of an official explanation, some banks simply tell us that they do not want to work with crypto companies. It is almost impossible to start a crypto business in Portugal at this time.

Pedro Guimaraes, founder of Mind the Coin, in Jornal de Negocios

And they have no choice but to seek hospitality under milder climes.

We now have to rely on using accounts outside Portugal to continue operations.

Pedro Borges, CEO of CriptoLoja, in Jornal de Negocios

In fact, it seems that Portugal, which has welcomed many crypto players in recent years due to a rather favorable positioning supported by favorable taxation, seems to want to change its policy. The country is no doubt keen not to marginalize itself at a time when the European Community is raising the bar and tightening the screws, and is on the verge of overhauling its taxation of individuals and could introduce other changes to strengthen monitoring of its ecosystem .

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