South Africa: Bank Drops Bitcoin Exchanges Citing ‘Regulatory Clarity’

Timor Invest
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Bitcoin (BTC) exchanges in South Africa will lose their banking support after a local bank confirmed it was closing their accounts.

As local internet magazine My Broadband reported on Nov. 19, FirstRand Bank (FNB) — one of the largest financial institutions in South Africa — sent letters regarding the move to an unspecified number of “major exchanges,” including Luno, ICE3X and VALR.

Exchanges blocked due to “risk appetite”

Exchanges affected have until the end of March 2020 to make alternative arrangements, Luno Africa general manager Marius Reitz told the publication.

The letter from FNB reportedly blames regulatory uncertainty for the decision. An excerpt reads:

“FirstRand Bank has been considering its risk appetite in respect of virtual currencies and virtual currency exchanges for some time. Within this context the bank has taken the decision to discontinue the provision of banking services to virtual currency exchanges and/or entities dealing/trading in virtual currency. Future regulatory clarity may cause us to revise our decision.”

Other banks still on board with Bitcoin

South Africa continues to enjoy a surge in cryptocurrency interest as its currency wavers. As Cointelegraph reported, peer-to-peer platform Paxful alone reported a 2,800% volume increase last month. 

Commenting on the banking loss, Reitz meanwhile said Luno was not concerned and that other lenders were still prepared to service the business.

“We do not anticipate any impact to our existing customers as we have other banking relationships in place to support deposit and withdrawals on the platform,” he added.

Last week, popular adult entertainment website Pornhub faced a total embargo on payments to its 100,000 models due to a snap decision to end support from PayPal. In an ironic twist, days later, PayPal’s former chief financial officer had his bank account terminated.