When it comes to cryptocurrency adoption and investor-friendly policies, Portugal is a head above others. However, the once crypto-friendly country is no longer welcoming to digital assets. Most of the top financial institutions in Portugal are freezing the bank accounts of crypto exchanges.
Portugal’s Banking Giants Go After Crypto Firms
According to a report, the country’s largest commercial bank closed the account of a crypto trading firm. The Banco Comercial Portugues has ceased using a bank account belonging to the crypto exchange, CriptoLoja.
Pedro Borges, affirmed that another banking heavyweight, Banco Santander, also did the same thing.
It is not just the big players in the Portuguese banking sector that are after crypto businesses. Borges confirmed that even smaller banks had closed his company’s accounts without further explanation.
Similarly, two other digital asset service providers in Portugal also suffered the same fate as CriptoLoja.
The founder of Mind The Coin, Pedro Guimaraes, noted that his company could not open new accounts elsewhere. According to him, the clampdown began earlier in the year without a prior official statement from the banks.
Meanwhile, regulations in the crypto space seem to be broad due to several regulatory scrutinies of the industry. Financial watchdogs from the United States to Europe have been moving to more enforcement.
Crypto platforms are coming under increased observation by authorities following a string of losses from the market correction. The central focus of regulators is to prevent money laundering and address investors’ risk in the crypto space.
Banco Commercial reiterated that banks must report suspicious transactions to authorities. Similarly, an executive from Banco Santander revealed that banks act based on their understanding of risk.
However, the banks did not mention an exchange that violated Portugal’s rules on illicit transactions.
Reaction Trails Bank’s Action
CriptoLoja’s CEO, Pedro Borges, noted that they have always reported suspicious activities to authorities. While speaking to Bloomberg, Borges disclosed that exchanges rely on accounts outside Portugal. In addition, the firms have met and fulfilled all the requirements before using offshore accounts.
On a broader scale, the latest line of action taken by banks has affected the operations of Portugal’s crypto firms. Surprisingly, the central bank has issued all affected exchanges a license. This will no doubt impact the perception of others concerning investing in digital assets in the country.
Portugal has one of the most favorable policies for crypto companies. The country became a haven for investors and firms who set up bases due to the zero tax on profits.
However, Portugal’s status is beginning to shift, and it would see it have stricter regulations. This signals what lies ahead for exchanges looking to continue doing business in the country.
Mind The Coin founder, Pedro Guimaraes, added that the banks gave no official statement about their actions. Some banks, however, disclosed that they would no longer do business with crypto firms.
This is perhaps the wrong time for overseas crypto exchanges to set up a base in Portugal.