Cryptocurrency firms in the United Kingdom are facing a growing challenge as they struggle to access banking services. According to Bloomberg, a number of sources have revealed that banks working with crypto firms are now requesting more documentation and information about how they monitor clients’ transactions.
This has resulted in a host of issues for crypto companies, including rejected applications, frozen accounts, and overwhelming paperwork.
The situation has become so dire that crypto companies have even resorted to complaining to the government of Prime Minister Rishi Sunak. This is a worrying development for Sunak’s plans to prioritize financial technology disruption and make the UK a global crypto hub.
“The U.K. banking reaction has been more acute than the EU one,” says Tom Duff-Gordon, Vice President of International Policy at Coinbase. Duff-Gordon adds that the European Union’s efforts to establish a framework for digital assets are making banks more receptive to crypto firms in other countries.
The European parliamentary committee recently passed the Markets in Crypto Assets (MiCA) legislation in October, with its final vote scheduled for this month.
The difficulties facing crypto companies in the UK are also having an impact on investment in digital asset companies.
According to data from PitchBook, venture capital investment in digital asset companies in the UK dropped 94% to $55 million in 2023, compared to a 31% increase in other countries in Europe. In response, crypto companies are turning to payment service providers such as BCB Payments and Stripe to maintain business operations in the UK.
