The bank has taken this action despite the exchange having followed all relevant anti-laundering and “know-your-customer” regulations. FYB-SE has been in operation for the past 16 months. The bank is shutting down their account as of Friday 14 November. Fiat deposits and withdrawals will cease as of this date, but Bitcoin deposits and withdrawals will be unaffected.
BTCX, another Swedish exchange, has similarly claimed that several of its bank accounts are currently subject to the threat of closure.
FYB-SE has responded by publishing an interim proposal. Rather than ceasing operations, it will be downgrading its dependency on legacy banks. Taking their cue from the actions taken by Chinese exchanges earlier this year, the FYB team plan to switch over to a P2P model:
We will introduce an internal SEK transfer function by Friday, which will allow existing users who wish to withdraw their SEK balances to trade their balances with other users who wish to deposit SEK to the exchange. This will serve as an alternate avenue for users to deposit/withdraw SEK while we continue to try and secure a new bank account. We are also currently working on adding P2P options for additional functionality.”
Some have interpreted these events as indicating that Swedish banks are hostile to Bitcoin. But Peter Schuil – CEO of Swedish exchange Safello – recently claimed that both Safello and KnC miner have secured ongoing cooperation from Swedish banks. Schuil speculates that certain banks have independently taken a stricter stance to Bitcoin in light of stricter anti-money-laundering laws.
Some worry that the withdrawal of banking services from FYB-SE is part of a larger trend: an attempt to drive Bitcoin underground and tarnish its reputation. Others speculate that these events are simply a realization of the inevitable conflict between centralized banking systems and Bitcoin, a decentralized currency.
Sweden vs. other countries
While Sweden’s banks are blowing hot and cold, other regimes have taken a far more decisive stance on Bitcoin. The United Kingdom, for example, has taken a very liberal approach, eliminating tax on Bitcoin transactions.
In April, the People’s Bank of China told senior executives in the country’s banks to break ties with Bitcoin-related businesses. Bank officials urged executives to form task forces to monitor bank traffic for Bitcoin-related transactions, and warned that failure to take such action would result in public condemnation. The People’s Bank, like some of Sweden’s banks, appear to have been concerned with the risk that Bitcoin would facilitate the circumvention of anti-money laundering regulations.
The way in which the events in Sweden unfold will undoubtedly be an important precedent for banks and exchanges throughout the EU.
What do you think of the conflict between banks and Bitcoin, in Sweden and elsewhere? Comment below!
Images from Shutterstock.
Disclaimer: Author owns a small amount of Bitcoin, litecoin and ripple.
Last modified: March 4, 2021 4:41 PM