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Are Banks Still Closing Accounts Over Bitcoin Activity in Canada?

CoinGuyCoinGuy Administrator
edited January 2016 in Buying/Selling Bitcoins
There was an article on CCN about Banks Closing Accounts over Bitcoin Activity. We had talked about this in the past, but I am wondering if this is still the case in Canada. I have not heard of any recent issues.


  • DaStuffDaStuff Member
    edited January 2016
    This is a good question. I think it probably depends on the activity and your scope. I would assume that exchanges and other money service businesses get the brunt of the closures.

    We run our business banking through TD and I fully disclosed exactly what I was doing and the fact we were using bitcoin as a payment method and have not had any issues. (However the rep who set me up had no clue what bitcoin was)

    That being said, I have also had 2 mastercards closed after being tied to bitcoin businesses. I believe the one was closed for buying bitcoin through Circle, and the other for being linked back buying goods which were then sold using bitcoin.

    That being said.. I don't know how accurate this is but image attached.

  • CoinGuyCoinGuy Administrator
    This issue is there now seems to be at the banking level a divergence of Bitcoin (as store of value) and the technology (idea) of Blockchain. How this works out in the near future will be interesting...
  • Yes, they are. I have a leaked memo in front of memo dated from January 12th 2016, from a major bank's compliance departement, instructing all branches to close down accounts of clients which are either involved in mining or the operation of Bitcoin exchange platforms. It states that Bitcoin is volatile and may be involved in money laundering. Yeah, the price of almonds is way more volatile and they will still bank italian restaurants? Nonsense. Which is a massive irony since I am personally being contacted by this bank to discuss blockchain technology and I even gave a presentation on digital currencies and the blockchain to this bank's employees 6 months ago.

    I am personally sick and tired of having to run around and open bank accounts. Of the companies I am personally involved in, three had bank accounts shut down or were prohibited from opening bank accounts at some point (Bylls and Satoshi Counter included). I am personally aware that all major Canadian exchanges have had at least one account closed down by the banks. One of the accounts that was shut down had almost never been used: there was only one transfer from another Bitcoin company. It's not like we were accepting 3rd party cash deposits or anything of that sort.

    I'm thinking about making a complaint to the competition bureau. They have absolutely no valid reason to be doing this.

    Also, FINTRAC really dropped the ball on this one. It's been since 2014 we're waiting for "virtual currency regulations". How hard is it to write a 2 word paragraph? "Businesses who offer the service of exchanging virtual currencies with soverigeign currencies are considered businesses dealing in virtual currency" THAT'S ALL WE NEED!

    But even if we are regulated by Fintrac, I doubt the banks will ever bank us. A few banks prohibited their employees to attend a blockchain conference I was speaking at. I know for a fact that the president of National Bank, Louis Vachon, has a personal vendetta against Bitcoin.
  • CoinGuyCoinGuy Administrator
    I almost afraid to tell you which bank I use, now that you share this @bitfrank. Personally, I think we've entered a "don't ask, don't tell" scenario in most cases. @BitcoinCooperative this is something worthwhile for the newsbtc folk, don't you think?
  • @coinguy The best strategy is to have accounts at all the banks. For personal accounts, this is very easy to do. But if you're running an exchange, it's a lot more difficult and it doesn't really matter which bank you're with - they pretty much have all the same policy. I know for a fact that BMO, TD, RBC and Banque Nationale have explicitly written instructions from the compliance team sent out to branch manager and coporate account managers instructing them to not open accounts for bitcoin exchange businesses.

    It's not newsworthy for the Bitcoin Community, we all know this. It will be newsworthy for the Financial Post, though. I know for a fact that La Presse is interested in this, talking to them Friday actually.
  • CoinGuyCoinGuy Administrator
    @BitFrank that's great you are brining the spotlight. Please keep us posted.
  • CPLCPL Member Plus
    edited January 2016
    CoinGuy said:

    This issue is there now seems to be at the banking level a divergence of Bitcoin (as store of value) and the technology (idea) of Blockchain. How this works out in the near future will be interesting...

    It's really up to them to be part of the future or not isn't it. No one has to twist their arm, but when a percentage happens in transactions world wide they'll get crushed pretty quickly...although it appears that is going to happen anyways with the math that is about to pull the last couple of jenga pieces out of the tower.

    Just have to keep rendering, keep developing and wait a bit longer.
  • I know this is a fairly old thread, but I wanted to clear up this issue as I read about similar stories online.

    If a person wants to wire a few thousand dollars from their bank account into a bitcoin exchange, why does the bank care? I'm not talking about borrowing money from the bank. I mean just transferring my own money that I earned.
  • CoinGuyCoinGuy Administrator
    edited August 2017
    This is mostly due to the illusion of freedom. It may be your money, but you really can't do as you please. Some banks will close due to concern with money laundering etc. Read more about here:

    Take precautions in any dealing with Bitcoin and I would suggest not to do your Bitcoin business with your primary bank due to this risk...
  • @time_btc banks CLAIM that it's due to money laundering but their full of #2. It's because they fear that clients will stop using their services, which hurts their bottom line. Plain and simple, they don't want to compete in an arena they yet can't control.
    They make so much money from wire transfers, remittance, etc. They don't want to lose that. I have read quite a few articles (unfortunately cannot find the links to post here, sorry) that their own personnel helped facilitate laundering of money. The only reason it came to light is because they got caught; just imagine what we don't know about! It also depends on who you deal with at the bank.

    @CoinGuy also states a great point, "illusion of freedom". The GoC and banks work together to control us poor individuals. If they (G0C) really wanted to, they would have already set into motion actions to govern cryptos.

    Another great point mentioned, open a secondary account at another institution to facilitate your transaction.

    Just to put into perspective what type of control the government has over your bank account: a client of mine (i worked at the bank) owed approx. $3k in taxes to the government, she had over $12k in her account. They froze her ENTIRE account balance; she had 0 access to her funds. This was also her fault because they do indeed contact and threaten you before getting to that point. My point is, they have total control over you and your finances; you're just a number for them, not a person.
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