Three crypto companies in Portugal have been left stunned at the decision of key banks to close their accounts.
According to CriptoLoja CEO Pedro Borges, four banks, including Banco Comercial Português and Banco Santander, have shut down the bank accounts of the exchange in the last few weeks. The banks provided no reason.
Furthermore, Mind the Coin, another crypto firm, struggled to open an account a few months after all its other accounts were closed. Competitor Luso Digital Assets suffered a similar fate this year.
Ironically, on Aug. 29, 2022, Santander Brazil, an arm of Spanish giant Banco Santander, announced its launch of new crypto-related products to retail and institutional investors.
Banks provide unclear reasons
In defense of its closure of CriptoLoja’s account, Banco Comercial said that it is responsible for reporting suspicious account activity to relevant authorities, which may influence the closure of specific accounts.
Banco Santander said that account closures depend, amongst other factors, on the bank’s risk assessment in keeping the account open.
Borges’ company received the first license from the central bank to operate in Portugal. The company is now dependent on offshore accounts. He defended his company’s position, saying that the exchange consistently reported suspicious activity.
Could Portugal follow in Nigeria’s steps?
Sixty percent of crypto exchanges in Portugal that hold licenses from the central bank have now been affected, which could spell a challenging future for the industry in the European nation. Bison Bank became the first bank to receive regulatory approval to operate a crypto exchange and custody company in the country, and the fifth exchange overall.
This is after crypto fans migrated to the nation during the Covid-19 pandemic, excited at the prospect of zero tax on capital gains, except for professional traders and the mild weather.
According to Jornal de Negocios Wednesday, lenders Caixa Geral de Depositos and BiG have also closed or rejected applications to open new accounts.
Portugal could follow in the steps of Nigeria, which was long considered the hub of crypto hubs in Africa. However, the Central Bank of Nigeria ordered a blanket shutdown of all cryptocurrency firm accounts last year.
This path seems unlikely, given the Portugal government’s creation of a working group of public and private institutions and persons to help build a national strategy.