First Republic to Shut Down Services Rendered to Cryptocurrency ID Startup Civil
According to reports, the San Francisco based, First Republic, a major lender in the United States will be stopping servicing of blockchain startup firm, Civil.
CIVIL COO'S EXPLANATION
On the 24th of May 2019, the COO of Civil, Naima Jinnah, in an email sent to her colleagues, explained that First Republic will be shutting off services to Civil on the 6th of June “because we are a crypto-related company”
In addition, the COO said that, Civil which is based in Delaware, will find it hard to find another bank because it is yet to obtain a “foreign certificate” which is needed to have operations in the state of New York. This will require Civil file its 2017 tax returns, which they plan to do soon.
In the mail she also noted that attempts have been made for other banks to handle its services with none forthcoming, these banks include: Chase, Bank of America and Silvergate.
NEW BUSINESS MODELS
Civil which aims to offer new models for online journalism, supports and provides a platform for news outlets, some of which Include Sludge and Hmmdaily. They also seek to provide a way for readers to check for accuracy in stories as well as fund public interest reporting.
A COMMON STRUGGLE FOR CRYPTO STARTUPS
A source at ConsenSys which was a pioneering supporter of Civil, described the Civil situation as ‘typical' as banks usually shy away from startups when they discover they are involved in or based on cryptocurrency. “and before you know it, the account is shut down,” he stated.
The ConsenSys source added that these startups try not to publicize these struggles with banks because they fear that will vilify them even more.
“It’s swept under the carpet to a certain extent because everyone is struggling to hold an account down, and doesn’t want to lose the one they have,”
The fear of banks backing somewhat legitimate crypto-related startups is one major reason why middlemen have come in to bridge the gap, such middlemen include Capital Corps and payment processor, Cry.pto.