Bitcoin seems to be taking a break from its recent rally as it back below the $40,000 region. The token’s meteoric rise over the past year has compelled some of the major banking institutions to change their tune about the flagship cryptocurrency. However, HSBC, another banking giant, has become the latest to reject cryptocurrencies amidst a time when Bitcoin is posting fresh highs.
According to a report from The Sunday Times, HSBC is blocking transactions to and from cryptocurrency exchanges along with some other banks in the U.K. who have all taken steps to prevent their customers from purchasing cryptocurrencies using their credit and debit cards.
Regulators in the U.K. have been quite strict when it comes to regulating the crypto space. Any businesses looking to provide services related to cryptocurrencies must obtain a license or they won’t be allowed to operate in the nation.
Talking on this matter, CNBC host and Onchain Capital founder, Ran Neuner, if banks go down this road, customers will make the choice to bank elsewhere when restrictions will be imposed on what they can do with their own assets.
Meanwhile, Jason Yanowitz from Block works group tweeted:
Since the decentralized nature of cryptocurrencies has been a threat to the profit margins for banks, they have always been hesitant about accepting cryptocurrencies. However, this was the primary reason that fuelled the development of cryptocurrencies in the first place.
HSBC involved in Money Laundering
It is unclear what the reason behind HSBC’s recent move was. But in most cases, banks have cited concerns regarding illicit activities like money laundering as the reason why cryptocurrencies are a problem in their view.
Ironically, HSBC itself was recently involved in a global money-laundering scandal. According to some leaked documents from the U.S. Financial Crimes Enforcement Network (FinCEN), HSBC, along with some other banks, facilitated $2 trillion in criminal transactions.
Surprisingly, the leaked documents add these transactions were initiated right after HSBC was fined a record $1.9 billion in the U.S. for helping dirty money flow through its branches around the world, including at least $881 million controlled by the notorious Sinaloa cartel and other Mexican drug gangs.
The above factors could be the reason why HSBC is being extra cautious when it comes to cryptocurrencies.