Portuguese Banks Closing Crypto Exchanges' Accounts for Potential Criminal Risks

Fazzaco learned that Portuguese commercial banks are shutting down the accounts of crypto exchanges to avoid the potential for criminal activity in the crypro industry.

In Portugal, many crypto exchanges had their accounts closed even though they are licensed to operate there. 

Last week, Banco Comercial Português, and Banco Santander (SAN), Portugal's largest bank, closed Portuguese crypto exchange CriptoLoja's accounts. Besides, the exchange is no longer allowed to hold any assets in those banks.

Earlier this year, accounts of crypto exchanges Mind the Coin and Luso Digital Assets were also shutted by Portuguese banks, according to reports.

Additionally, Portuguese banks have been closing crypto exchanges' accounts over the past year, as they were concerned about crypto exchanges in facilitating money laundering and other criminal activities.

Pedro Borges, the CEO of CriptoLoja said: "From the corporate side it's a nightmare. A simple payment is not as easy as if we had a bank account here in Portuga. This kind of nuisance, these kinds of measures that the banks are taking are not good for the country."

Luso Chief Product Officer Ricardo Felipe said that last year national bank Caixa Geral de Depósitos gave him no reason why the exchange is no longer allowed to hold accounts with the bank. Banco Comercial Português and Banco Santander said they closed accounts this year because of suspected fraudulent clients. 

"The regulatory landscape in Portugal allows for banks to legally terminate accounts with cryptocurrency exchanges without any input from the regulator,”Felipe added, "Even though we do have an [anti-money laundering] regulation or license from them, it's not something that establishes that kind of operation with the banks."

According to local lawyer João G. Gil Figueira, crypto companies secures licenses to operate in the country from the central bank, Banco de Portugal, which regulates all Portuguese banks. Nevertheless, commercially independent banks are authorized to allow these companies to open accounts in their banks and can terminate them whenever they choose.

EU has recently passed landmark MiCA​ crypto authorization law, which provides a regulatory framework for digital asset regulation, from stablecoins to initial coin offerings, as well as creates a common licensing regime, allowing companies to easily set up in each of the EU's member nations.

These Portuguese crypto companies hope to benefit from MiCA. "With MiCA, we will turn into financial institutions. We will have that safeguard of being given partner bank accounts in Portugal, even if the bank wants to conceal them," said Felipe.

However, the lawyer Figueira held the opposite view. "MiCA will not have an impact in the [anti-money laundering/know your customer rules] regard, as much as it will have an impact on consumer protection, so more so on the creation, issuance and investment in such assets. It will not so much have a direct impact on the banking aspects and issues that we are discussing," said Figueira.