Finnish Bitcoin Exchange Prasos Loses Bank Partners

Four out of five domestic banks have blocked the crypto exchange’s accounts due to money laundering concerns.

by Kalina Tekelieva
12 March • 2.5 min
In News
New anti-money laundering rules drive banking partners away from Finnish crypto exchange Prasos, Bloomberg reported on Friday. 

Prasos, the largest Bitcoin service provider in Scandinavia, has lost access to its accounts at four banks in Finland - the co-operative S-Bank, the OP Group, Saastopankki and Nordea Bank AB. As a result, now the platform depends on only one bank, POP Bank, to carry out its operations.
 
The move puts Prasos in a delicate position, since its business is based on exchanging virtual currencies against euros and the platform cannot but rely on bank institutions for the converting.

stamp on bank documents

At the background of the withdrawal of the four banks lie worries about breaching anti-money laundering rules, which intensified after the EU agreed to tighten regulations in December last year. As the agreement aims at increasing transparency of the ownership of companies and trusts, banks have grown more careful towards the crypto industry, where anonymity is central.
 
According to Tomi Narhinen, CEO of Saastopankki, quoted by Bloomberg, “in most cases it’s practically impossible or at least very hard to do business with cryptocurrency dealers and exchanges, because it can be impossible to determine the origin of the funds”.

physical Bitcoin

In addition, in 2017 Prasos saw its transaction volumes grow 10 times on an annual basis, which further deepened the banking institutions suspicion of the crypto business, the exchange’s CEO Henry Brade told Bloomberg. He claimed though that banks have provided too little information on what Prasos could do to deal with the problem.

Attempting to counter the cautions of the banks, Prasos is going to introduce identification practices, which “comply fully with anti-money laundering laws and regulations” although authorities do not require this from the dealer, since its business in not under regulatory obligations, Brade said.

Nevertheless, concerns remain. “The risk is that we’ll see our last bank account closed before we can get the next one opened,” Brade said, adding that this would freeze their business.