South African FNB Closes Crypto Exchange Accounts

South Africa’s First National Bank (FNB) has announced that it will be shutting down accounts linked to crypto exchanges.

November 20, 2019, | AtoZ MarketsIn what is evidently a blow to the fast-growing crypto ecosystem in South Africa, one of the country’s big ‘five banks’ disclosed today that it will no longer offer its services to cryptocurrency exchanges.

FNB stops lending support to South African crypto exchanges

As per a letter by MyBroadband, FNB made their decision known to cryptocurrency exchanges, including Luno, ICE3X and VALR, that the bank would no longer provide services to crypto-related companies.

FNB stated that the decision is taken due to serious consideration of its “risk appetite” for crypto-related activities. It, however, promised to review the ban if regulations around the emerging industry become clearer in the future.

An excerpt of the letter purportedly seen by MyBroadband reads:

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FirstRand Bank has been considering its risk appetite in respect of virtual currencies and virtual currency exchanges for some time. Within this context the bank has taken the decision to discontinue the provision of banking services to virtual currency exchanges and/or entities dealing/trading in virtual currency.

Crypto exchanges are optimistic

Sharing his thoughts on the development, Luno Africa general manager Marius Reitz said that the FNB ban isn’t the end of the road for the exchange. He also added that the ban would not affect their customer base because they maintain other functional banking relationships.

ICE3X, another of the affected exchanges, shared the same sentiments as Luno. The exchange expressed optimism that more precise regulations for the operation of the South African crypto industry would be provided in due course.

While the latest development is not expected to affect operations at the affected exchanges significantly, the fact remains that one of the ‘big five banks’ in South Africa closing its doors to crypto exchanges could pave the way for others to follow.

What could perhaps be the way forward is for the country’s central bank to finalize its reported development of regulation for the crypto industry, a situation that will reinstate the relationship of crypto exchanges with banks like FNB.

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