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Financial giants including JP Morgan, HSBC closing down bank accounts of cryptocurrency companies to hinder adoption, finds report




Financial giants including JP Morgan, HSBC closing down bank accounts of cryptocurrency companies to hinder adoption, finds report
Source: Pixabay

Companies operating in the decentralized cryptocurrency space have often been at loggerheads with their traditional counterparts. Large financial institutions, which control systems that facilitate monetary deposits and withdrawals, see cryptocurrency newbies as ‘disruptors’ and some have even shown these crypto-companies the door, preventing them from using their banking services.

According to a report by Bloomberg, crypto-companies have often been “refused banking services” by top financial giants like HSBC Holdings Plc and JP Morgan Chase & Co.

Traditional financial institutions have been wary of the cryptocurrency community since it emerged over a decade ago, with several top-financiers labeling the market a “scam” and a “delusion”.

Despite the cryptocurrency industry wanting a laissez-faire regulatory system, some want the government to step-in, bringing in limited, but necessary guidelines so that frauds and manipulations do not materialize. This was attested to by Robby Houben, a Professor at the University of Antwerp, who also co-authored a paper on crypto-related financial crime and presented it before the European Parliament.

Despite Bitcoin [BTC] coming a long way since its Silk Road days, a one-size-fits-all ban is being implemented by big banks to keep out crypto-companies.

Sam Bankman-Fried, Chief Executive Officer of Alameda Research, a digital-assets trading firm in California said,

“The standard answer of `just go to your local Chase branch’ doesn’t work in crypto. It’s not illegal for big banks to bank the crypto industry, but it’s a massive compliance headache that they don’t want to put the resources in to solve.”

Top cryptocurrency exchanges were also affected by this ‘shuttering’. Among them, Kraken saw its bank accounts with JP Morgan Chase and Bank of America Corp being closed on short notice. Jesse Powell, the exchange’s CEO, went on to claim that he had to “employ the arts of a money launderer” to stay afloat.

Some crypto-proponents are however, looking at the problem as an opportunity for further adoption, moving away from the traditional banking-and-fiat sector. In fact, salaries in many cryptocurrency companies are done via digital assets, including fiat-backed stablecoins. Mark Lamb’s ConFLEX, a cryptocurrency derivatives exchange in Hong Kong is one such example.

Lamb stated,

“The banking system has never been friendly to crypto, and while maybe that made some sense in the early days, continuing to label all crypto businesses as high-risk is indefensible and protectionist. I’m washing my hands of them and now avoid banking altogether.”

In light of this clash, cryptocurrency companies are vying for better banking relationships to strengthen their financial base.

Ben Sebley, the Head of Brokerage at NKB Group summed up the debacle, stating,

“Denying basic banking is madness, impedes sector growth and forces companies to get creative to solve the problem.”

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Ethereum [ETH]: Samsung planning to create its own ETH-based blockchain; may issue own token soon

Akash Anand



Ethereum [ETH]: Samsung in the works to create its own ETH-based blockchain, may issue own token soon
Source: Pixabay

The mainstream adoption of cryptocurrencies and blockchain technology has come a long way, with many financial and non-financial institutions now entering the mix. Technology giant, Samsung, is not new to the field, as the South Korean organization previously blew up the cryptosphere by meshing crypto with the launch of the company’s latest flagship device, the Galaxy S10.

Latest reports now suggest that Samsung is getting more serious about virtual assets, as the company might be on its way to create its own Ethereum [ETH]-based blockchain network, with the prospect of launching its own cryptocurrency token in the near future. An anonymous official from the organization stated,

“Currently, we are thinking of private blockchain, though it is not yet confirmed. It could also be public blockchain in the future, but I think it will be hybrid—that is, a combination of public and private blockchains.”

Sources from within the company added that blockchain technology is being developed by the wireless technology division of Samsung. Despite the fact that it has not been confirmed as to what devices will provide support for the blockchain, a company official revealed that “some models are being tested for it.”

Samsung’s tryst with Ethereum has been ongoing for quite some time now, with previous developments suggesting that Ethereum could be vulnerable on the S10 device. This was evidenced by a video put out by a user ‘darkshark’ on Imgur, in which it was shown how easy it was to crack the phone. Darkshark stated,

“This brings up a lot of ethics questions and concerns. There’s nothing stopping me from stealing your fingerprints without you ever knowing, then printing gloves with your fingerprints built into them and going and committing a crime.”

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