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An Irish crypto company said its business suffered after one of the country’s largest banks shut down its account.
Bryan Tierney, founder of ATM operator , told CoinDesk Allied Irish Banks (AIB) notified the firm last August it was closing its account – initially without any official reason. It was only when Tierney put the account into an arranged overdraft – which precluded the bank from closing the account – that AIB sent an explanation in writing.
Dated Oct. 10, AIB’s letter said the account was being closed because “the market for Cryptocurrencies in ROI [Republic of Ireland] remains unregulated” and remains unrecognized as money or legal tender by the Central Bank of Ireland (CBI).
While the European Union’s fifth Anti-Money Laundering Directive (5AMLD) – which requires crypto companies to register with local regulators and hold information on clients’ source of funds – would “impose new requirements” on crypto businesses, according to the letter, it hadn’t been implemented at the time. “This type of business activity [emphasis theirs] is outside of our risk appetite at this time,” AIB concluded.
Although Ireland was set to transpose 5AMLD over into local law along with the rest of Europe in January, this still hasn’t taken place. A tie among three of the main political parties in a general election earlier this year has left the country without a government majority. With the coronavirus now a national priority, it’s unlikely 5AMLD will be transposed until much later this year.
For Irish cryptocurrency companies like Boinnex, the delay in 5AMLD means they are left without access to mainstream financial services. A legislative draft has been publicized, but until it’s enacted businesses will remain stuck in a kind of regulatory limbo.
Boinnex spent thousands of euros making sure they were compliant with the 5AMLD requirements, according to Tierney. Although the team is only three people full-time, they still had to bring on a part-time compliance officer to assist those efforts.