The U.K.’s Financial Conduct Authority (FCA) has released a controversial report addressing the challenges faced by crypto firms in accessing banking services. The report reveals that discussions were facilitated by the FCA between banks and crypto firms, aiming to find solutions to this issue.
The report comes in the aftermath of allegations made by Nigel Farage, a broadcaster and former politician, who claimed that his bank account was closed due to his political views. The FCA’s report states that the most common reasons for account applications being declined, suspended, or terminated were suspicions of financial crime, concerns regarding due diligence, and inactive or dormant accounts.
The FCA’s report includes data collected from 34 credit institutions and payment firms, which indicates that some payment account providers are reluctant to offer banking access to the crypto industry. However, despite having limited time to allocate to the issue, the FCA has taken steps to influence decisions in order to maintain market integrity.
The report highlights the significance of dialogue between crypto firms and banks. It suggests that such discussions can lead to a fair and balanced approach, where decisions are clarified and potential risks are mitigated. The FCA aims to encourage a cooperative environment between the two sectors to ensure that all concerns are addressed.
As for allegations of political bias influencing account closures, the report dismisses these claims, stating that the cases flagged as potentially politically motivated were, in fact, mostly due to customer behavior, including instances of racism. The FCA emphasizes the importance of a risk-based approach rather than a broad brush policy when considering new customers.
During a briefing on Tuesday, Emad Aladhal, Director at the FCA, stressed the need for a risk-based approach in handling customers. He stated that adherence to regulations is necessary, and a comprehensive understanding of customer behavior is crucial to avoid unnecessary account closures.
While the report sheds light on the challenges faced by crypto firms in accessing banking services, it also emphasizes the FCA’s commitment to finding solutions through dialogue and cooperation. By encouraging discussions and striving for a fair and balanced approach, the FCA aims to create an environment that supports the growth and stability of both the banking and crypto industries.