FNB Stops Lending Support to South African Cryptocurrency Trading Exchanges

FNB, the brainchild of South Africa’s leading financial services giant FirstRand Bank has notified an array of country’s major cryptocurrency exchanges about the closure proceedings about their bank accounts. The trading exchanges being alarmed by FNB include big players like Luno, ICE3X, and VALR.

As per a letter by MyBroadband, FirstRand Bank has informed the best crypto exchange platforms that it has been contemplating measures concerning its “risk appetite” for the digital currencies and exchanges and so has taken the critical step of halting the banking services for some exchange platforms. The globally reputed banking conglomerate affirmed that it might revisit its decision of closure if the air of uncertainty, which is presently hovering over the arena, gets vanished.

An excerpt from the letter clarified the firm’s consideration by stating that

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.

Future regulatory clarity may cause us to revise our decision.

In response to FNB’s letter, Marius Reitz, Luno Africa General Manager, released a statement stating that

We can confirm that FNB has decided to close our account with effect from end March 2020, along with other crypto exchanges in South Africa.

He affirmed the exchange customers that they would be able to enjoy hassle-free deposits and withdrawals on the platform aided by services from other banking entities.

The spearhead revealed that his platform would be working with the SA Reserve Bank along with major collaborations with other regulatory authorities to ensure that it is competent to adjust with the sudden change in the financial infrastructure. He added that

We need to remember that cryptocurrencies are very new and so this move is not unique to SA while regulation across the globe continues to be shaped; it is one of the biggest challenges crypto companies face globally.

ICE3X crypto exchange notified its customers about FNB’s decision to shut down the bank accounts and assured them that the exchange platform would do everything possible to ensure the continuance of their services to the customer base by all means.

Farzam Ehsani, the co-founder of VALR, quoted stated that his team is in constant discussions with FNB to know the exact date of termination. He affirmed that he would inform the customers about the termination date in advance. Ehsani clarified that the exchange is adamant about giving its customers the best of facilities, irrespective of the closure, by channelizing operations with other renowned banking partners.

The leader of VALR thanked other banking service providers for showing trust in his cryptocurrency exchange platform. He added that his team has been at the forefront in complying with the local as well as international regulatory guidelines and laws.

Interestingly, when MyBroadband tried to get a comment on the issue from FNB, the organization excused itself from giving any further details because of privacy concerns.

David Cox

David is a finance graduate and crypto enthusiast. He projects his expertise in subjects like crypto and Blockchain while writing for CryptoNewsZ. Being from Finance background, he efficiently writes Price Analysis. Apart from writing, he actively nurtures hobbies like sports and movies.

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