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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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Bitcoin [BTC] is still going to $100,000, claims Heisenberg Capital’s Max Keiser




'Bitcoin is still going to $100,000', says Max Keiser
Source: Unsplash

CNBC’s Crypto Trader Ran NeuNer, spoke to Max Keiser, Co-founder of Heisenberg Capital on the sidelines of the Magical Crypto Conference and discussed Bitcoin’s current trends.

Keiser said that he was bullish on Bitcoin in the long term, adding that he would be sticking by his “$100,000” prediction for Bitcoin. He stated,

“I never stopped make price prediction… I said it [Bitcoin] was going to a hundred thousand dollars and it was only a dollar and I said that all publicly… it is still going to a hundred thousand dollars”

He added that the timing of when Bitcoin would reach the mark was not important, but that it would outperform every other asset over the next 15 years. Additionally, he said that timing was only for people who were waiting to buy crypto at a better price and “that is a bad way to approach crypto.”

Keiser displayed his enthusiasm for crypto, commenting that, “Stack Satoshis… Stack SATs… you should be stacking SATs.” Giving his opinion on Bitcoin’s recent rally, Keiser said,

“I think that it goes back to when Federal Reserve issued a statement saying that they’re moving the policy to permanent quantitative easing… which means money printing without end. As you know Bitcoin is hard money, like gold, and it is going to respond well to hyperinflation and hyper-money printing.”

Further, Keiser claimed that Bitcoin bottomed when the Federal Reserve announced this a few weeks ago and that this was due to a couple of reasons. The first being Bitcoin’s upcoming halving which highlights the scarcity of Bitcoin. According to Keiser, the second reason was that the sellers were exhausted. All the above reasons, in totality, contributed to Bitcoin’s price rise, claimed Keiser.

Since Bitcoin has already proven itself as a store of value, Keiser remarked that it would be best to concentrate on Lightning Network, a layer-two scalability solution for Bitcoin and improve it as a medium of exchange.

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