Major banks in Hong Kong refuse to provide services to Bitcoin companies, and exchanges are forced to open accounts overseas

Hong Kong’s traditional banking sector is hindering, if not prohibiting, the smooth operation of bitcoin companies by rejecting applications, freezing existing accounts and extending review times, all without providing clear explanations.

Banks shut down Bitcoin company accounts

Thomas Glucksmann of Gatecoin said:

In the last two to three months, our user base has tripled. The price of Bitcoin is rising, and the amount of money customers deposit is also increasing - it's really not a good time.

He mentioned a sudden move by Hang Seng Bank - Gatecoin's account will be suspended.

Gatecoin is a cryptocurrency-to-fiat exchange based in Hong Kong.

Glucksmann said:

This was a huge shock to our business.

According to reports:

After local banks froze or closed their accounts, bitcoin entrepreneurs in Hong Kong said they were forced to open accounts in offshore banks to keep their companies running.

Gatecoin also has an account at Fubon Bank, but the bank has limited their daily transaction volume, which is almost the same as closing the account.

Bitcoin is its own bank

This phenomenon occurs because of the meaning of Bitcoin itself: users are their own banks. However, the current reality is that most people still hold a portion of legal currency for exchange or investment, so they must rely on traditional banks.

Bankers around the world have publicly expressed concerns that Bitcoin undermines anti-money laundering (AML) and know-your-customer (KYC) regulations, and businesses within the ecosystem are taking these requirements very seriously.

Glucksmann gave his assurances:

We always compare the bank transaction records of transfers in and out with the registered user names, and we save the (KYC) information of all users.

Due to restrictions imposed by banks, Gatecoin had to suspend processing users’ transfer applications.

Hong Kong remittance company Bitspark also has trouble with bank accounts. Founder George Harrap stressed:

Banking services are an expensive commodity in the Bitcoin world.

Like other bitcoiners in Hong Kong, they can only turn to banks in Europe to relieve the pressure.

Leo Weese, Chairman of the Hong Kong Bitcoin Association, said:

The few companies with bank accounts tried to be as cautious as possible. But ironically, even if they were careful, they still caused dissatisfaction with the bank. Apart from having their accounts closed, there was almost no other way.

Bitcoiners in Hong Kong believe the city has become hostile to the world-renowned cryptocurrency and that the region’s reputation as a business-friendly environment is at risk.

The Hong Kong Monetary Authority "denied the phenomenon of a large number of companies failing to open accounts." A spokesperson said the average monthly account opening failure rate is less than 5%.