No bank account? No chocolate. As the ecosystem continues to develop, both established and new players are often faced with challenges. banking difficulties. We all remember Binance, which on several occasions had to interrupt SEPA transfers because its partner bank did not wish to continue working with the platform. Is the situation improving? Not so sure.
Simple, basic, you don’t have the basics
In Hong Kong, despite claims by the local financial authority that there are no no prohibition in principle or guidelines to penalize access to a bank account for crypto companies, the reality seems quite different.
For example, Hang Seng Bank (a subsidiary of HSBC) reportedly offers crypto companies accounts » simple « or » basics « which would not allow access to all conventional banking services.
So there is a kind of double discourse between the local prudential authority which is keen to attract new players, and the attitude adopted by certain banks which, logically enough, do not look kindly on the arrival of players who could eventually compete with them (exchange platforms come to mind).
In France, it’s difficult to respect the right to an account
The crypto companies and french banks continue to not a good match. The difficulty for these companies to access bank accounts has been highlighted for many years.
So much so, in fact, that a report was drawn up by a working group set up under the impetus of the Autorité des Marchés Financiers (AMF) and the Autorité de Contrôle Prudentiel et de Résolution (ACPR) to try to move the situation forward.
This reportwhich was purely advisory in nature, had met with only limited response from banks. Credit institutions continue to emphasize the difficulty of carrying out the regulatory controls they are required to perform in terms of Anti-Money Laundering and Terrorist Financing (AML/CFT).
And obtaining a registration as PSAN is not at all synonymous with improvement of the situation. In fact, PSANs are treated no better than any other unregistered player.
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The right to an account inoperative
You may not know it yet, but in France there is a right to an account. This right, codified in the interminable article L.312-1 of the French Monetary and Financial Code entitles any individual or legal entity domiciled in France to « basic » banking services, including a bank account.
To prevent abuse, banks can only close these same accounts for a limited number of reasons. Unfortunately for crypto-game companies, one of these reasons is » the use of the bank account for operations that the organization has reason to suspect are pursuing illegal ends « . Since French banks still systematically associate cryptocurrencies with money laundering, it’s easy for them to claim a suspicion of illegality in the matter.
As the right to an account, as initially conceived by the legislator, is not working as it should, there is a reinforced right to an account. But the latter is really just window dressing.
The reinforced right to an account: a damp squib
For some players in the crypto ecosystem wishing to carry out an ICO, it is possible toobtain an AMF-approved Visa.
This Visa allows issuers of digital tokens to be registered on the AMF’s white list and to benefit from « efficient » banking services. Unjustified hindrance of Visa holders is also prohibited, although there are no real sanctions to encourage compliance.
However, there is no text specifying or listing these efficient services, the provision of which remains at the discretion of the banking establishment. In addition, account opening can, in case of silence of the bank, take 4 or 5 months after a new referral to the ACPR. This unusually long delay explains why crypto companies tend to open accounts abroad.
What about licensed PSANs? Don’t worry, they’re banks!
Ironically (or in a vast conspiracy, everyone can make up their own mind), the criteria for obtaining PSAN approval are so complicated that it seems only the banks themselves can meet them.
These criteria include, but are not limited to:
- obtaining professional indemnity insurance with cover of not less than 400,000 euros per claim and 800,000 euros per year, or building up sufficient equity to enable the company to act as insurer itself;
- the implementation of an adequate security and internal control system (compliance and LCB-FT);
- Systems for managing conflicts of interest, informing customers and handling complaints;
As a result, it is totally impossible for a recently created company to meet these criteria. Only financial institutions or their subsidiaries are eligible. Except for start-ups that manage to raise such substantial equity that they can afford to dispense with professional insurance. However, this scenario remains highly unlikely. Since banks are also insurers, it’s easy for them to insure their own crypto-dedicated subsidiaries.
And so it is that Forge, a subsidiary of Société Générale, became the first PSAN-accredited company in France. As chance would have it. It goes without saying that the majority of players in the ecosystem are playing a game whose dice have been loaded from the outset. Regulation favors traditional financial players to the detriment of innovation.
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