HSBC and Barclays Freeze 50cycles Bank Accounts After Bitcoin Trading Transactions
HSBC and Barclays took a drastic step when the owner of a company called 50cycles transacted on a cryptocurrency trading platform using his personal account. In response to the transaction, the companies froze the personal account.
The owner, CEO Scott Snaith, reported to iNews that after he had conducted several large bitcoin transactions with LocalBitcoins, a Finnish Bitcoin exchange, he noticed that he could no longer access accounts at the two banks, which was odd, especially because the traders on the other side of the transaction were UK citizens with verified IDs, and the transactions were “entirely transparent and above board.”
Snaith also reported that he conducted the transaction with his personal bank account, not that of his business account.
This is not the first time that banks have taken such action. For example, in January of this year, the Royal Bank of Scotland informed Gibraltar International Bank that it declined to process cryptocurrency related transaction, which then forced the latter to look for other correspondence services. Iqbal Gandham, head of eToro in the UK and chairman of CryptoUK, stated to the financial times, “The moment you mention crypto to a bank, it’s like you are a drug dealer.”
A few months ago, the Bank of Montreal started blocking debit and credit cards, and online services from processing crypto-related transactions due to the “volatile nature of cryptocurrencies.” Interestingly enough, the bank still agreed to service a new cryptocurrency exchange started by the Toronto Stock Exchange.
Snaith reported to iNews,
“I’ll never be able to bank with Barclays again. I’m a professional business owner taking advantage of new financial technologies and it looks like the banks are failing to keep up with their customers’ habits . . . the message is clear, your funds are not yours.”
50cyles is planning on launching a new bicycle called “Toba” which will generate cryptocurrency as one uses it – approximately 20 pounds for every 1,000 miles cycled. Snaith added,
“At the moment we are working with LoyalCoin to reward our customers but eventually the TOBA bikes will have their own digital coin which will become one of the thousand currencies of the future, and the TOBA will allow riders to become an integral part of its growth . . . it is a way of rewarding our customers and riders who are fully-committed to green transportation.”