Portuguese banks shutting crypto accounts citing risk management concerns

Regulation

Several large banks in Portugal have reportedly begun closing the accounts of cryptocurrency exchanges due to “risk management” concerns, suggesting a shift in Portugal’s pro-crypto position. The country’s central bank appears to have given the financial institutions the green light to take action.

Several of Portugal’s top banks recently closed the accounts of CriptoLoja, the country’s first cryptocurrency exchange to obtain a license to operate. According to a Bloomberg report, at least four domestic cryptocurrency exchanges have seen their accounts shut by BCP (Banco Comercial Portugues), Santander Bank, Caixa Geral de Depósitos, BiG, and Abanca.

All the exchanges are licensed by the Bank of Portugal, which regulates domestic cryptocurrency trading platforms. Three of the exchanges were identified as Criptoloja, Mind The Coin and Luso Digital Assets, with a third requesting that their name not be published by media platforms. The head of the Bank of Portugal, Mário Centeno, was quoted as saying that banks had complete freedom to do anything they wanted, but he promised to keep a close eye on the situation.

The Bank of Portugal’s oversight of exchanges includes ensuring that platforms combat money laundering and terror financing and work to prevent fraud. BCP told Bloomberg that its primary duty was to inform competent authorities if it detects “suspicious transactions,” which may lead to the termination of banking relationships with certain companies.

Cointelegraph reached out to CryptoLoja, one of the affected crypto exchanges, for comment but did not receive a response as of press time. This article will be updated when a response is received.

Related: Senator Warren proposes reducing Wall Street’s involvement in crypto

The closure of these accounts is seen as a blow to Portugal’s crypto-friendly approach, as authorities previously rejected two tax proposals that might have been applied to investors making money from cryptocurrencies. However, the government and financial sector have recently shown an increased interest in regulating cryptocurrency in line with other EU nations.

Crypto exchanges have had trouble obtaining banking services worldwide due to their perceived risk. As reported by Cointelegraph, United States Senator Elizabeth Warren is reportedly proposing a bill that would effectively ban bank-provided cryptocurrency services.

The Iberian nation has drawn Bitcoin entrepreneurs from around Europe, particularly Ukrainians fleeing the crisis in their home country. Around 27,000 Ukrainians lived in the Iberian nation before the military conflict with Russia, but their number has risen to over 52,000 today, making them the second-largest foreign population after Brazilians.

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