Hong Kong Banks Shun Bitcoin, Driving Startups to Seek Foreign Banks

Hong Kong banks have frozen and closed accounts of bitcoin businesses, forcing the companies to open foreign accounts, according to the South China Morning Post.

A representative of Hang Seng Bank advised the Gatecoin exchange on Sept. 15 that its account was suspended, without explanation.

Bank Freezes Account Without Notice
Thomas Glucksmann, Gatecoin’s marketing head, said the company had tripled its customer base in a two- to three-month period when the bitcoin price was rallying, and that the bank’s action caused a major disruption.

This was the first time a bank had frozen its account without prior notice, he said. Fubon Bank soon imposed a daily transaction limit that did not meet Gatecoin’s needs and effectively disabled the account, Glucksmann said.

While one of bitcoin’s missions is to exit the traditional banking system, new bitcoin buyers cannot purchase bitcoin without a local bank account.

Efforts To Comply Fall On Deaf Ears
Gatecoin has attempted to be the most AML compliant, transparent and strict exchange with banking partners, Glucksmann said, but these efforts have failed to come to fruition.

He said Gatecoin has always made sure it could associate every bank transfer with the name of the client that has registered. Gatecoin sent customers an email advising them transfers were suspended until the situation could be resolved. Gatecoin’s announcement alarmed some customers, who contacted the police out fear that Gatecoin would end up like Mt.Gox, the Japanese exchange that collapsed in 2014.
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