As of next month, Capital Treasury Services (CTS) will cease to work with the digital currency business in the Isle of Man. An unexpected statement considering the strong support for cryptocurrencies that was given by Isle of Man’s government. Unfortunately, there seem to be more requirements for a thriving cryptocurrency environment.
CTS was active in the Isle of Man as a banking solution for several digital currency companies. As a subsidiary of Capital International Group, CTS was responsible for holding funds for a variety of clients who were all involved with Bitcoin. As stated before, there was no lack of government support whatsoever. CTS claims that it experienced negative influence from its banking partners. These partners include HSBC and RBS. Under these circumstances, CTS was forced to halt its services for companies who were involved with digital currencies.
According to a statement from CTS, the company will close the accounts of the companies affected by this decision on 15th of October at the latest. The statement reads as follows:
“Although support from government is very strong, and we have been keen to get behind the government’s initiative, we are only able to do so with the wider support of the financial sector, which has, unfortunately, now been withdrawn.”
Simon Hamblin, CEO of Netagio, had the following to say bout CTS’ actions:
“We entirely understand that the decision is outside the control of CTS because of their active engagement with the Department of Economic Development of the Isle of Man Government and the wider Crypto-Currency community both locally and internationally. They rely on the support of the wider financial services sector, and this support has sadly been withdrawn.”
Netagio, being the first and only British exchange where retail customers and institutional investors can trade gold, Bitcoin and GBP, is heavily involved in the Isle of Man Bitcoin industry. Despite the sad news, they still remain hopeful for the future.
“As we look to the future, our customers are our first priority. We have been approached by a number of alternative finance providers in other jurisdictions, who are keen to work with us, to ensure that our customers’ investments are not only protected, but also they can continue to invest in Bitcoin and trade their positions against gold and GBP on the Netagio exchange.”
This does not mean these companies will be on their own. CTS will no longer take any more digital currency companies and close several accounts. In order to facilitate this process and help the affected companies, they will help find solutions in order to ensure these companies can keep on existing.
“We will be working closely with those businesses already with us in order to find alternative providers and solutions, and are happy to talk with businesses and provide guidance from our experience in the sector,”
the statement says.
Even though CTS will work day and night to support cryptocurrency companies, it leaves a great area of uncertainty in the Isle of Man cryptocurrency universe. What was once seen as a haven for Bitcoin enthusiasts, has evolved into yet another place where cryptocurrencies are bullied by the financial world. To make sure the Isle of Man remains an attractive place for future Bitcoin enterprises, the UK Digital Currency Association issued a statement that should ease everyone’s mind.
“No stone is being left unturned, and there is a great confidence that new banking solutions will be provided shortly,” said Eric Benz of the UK Digital Currency Association to CoinDesk. He also stressed the fact that CTS still believes in digital currencies. CTS is just the victim of its banking partners, making it impossible to keep working the way they have been doing.
The difference with previous news reports regarding Isle of Man is stunning. In March 2014, CCN reported that Isle of Man was well on its way to becoming an isolated paradise for Bitcoin enterprises. The Financial Supervision Commission (FSC) ruled that many of the island’s licensing laws do not apply to Bitcoin. This hands-off approach signaled the birth of a friendly relationship between the island government and novel Bitcoin-inspired payment systems. Many people believe that Bitcoin integration is still largely decided by local governments. It seems that the financial sector has enough power to bypass these authorities and rule over Bitcoin’s fate. An unfortunate trend that many people will not be surprised about.
Simon Hamblin closed his statement with the following words:
“Britain is making claims about its commitment to innovation, not least in the area of FinTech, and yet, regrettably, the banking industry does not seem to share this commitment. The sad impact is that this view – which some might argue to be anti-competitive – ultimately will drive innovation, talent and future economic benefit to other jurisdictions.”
Images from Shutterstock.