Portuguese banks suspend services to crypto exchanges citing “risk

Source: Adobe/Wilfried-R.

Several Portuguese banks have begun closing crypto exchange accounts for “risk taking” – and the country’s central bank appears to have given financial institutions its blessing.

Portugal has gained a reputation as a crypto haven in recent years for not charging capital gains tax on crypto gains. But in recent months, the government and the financial sector seem eager to regulate crypto in line with other EU countries.

According to the media magazine Expresso as well as Jornal de Negocios and Bloomberg, a number of banks – including the heavyweights Banco Comercial Portuguese (BCP) and Banco Santander like Caixa Geral de Depositos, BiG and Abanca – Closed accounts on at least four domestic crypto exchanges.

The exchanges are all on Portuguese Central Bank registered which oversees the domestic crypto trading platforms. The identity of three of the exchanges has been identified as Cryptoloja, Mind The Coin and Luso Digital Assets announced, while a fourth exchange requested anonymity in the media.

Bank of Portugal Governor Mário Centeno was quoted as saying that financial institutions have the power to do as they please, but added that he is “monitoring the matter”.

The central bank was further quoted as explaining:

“The decision to open or continue to offer bank accounts in such cases depends on the risk management strategies employed by each banking institution.”

The Bank of Portugal’s supervision of stock exchanges includes ensuring that the platforms combat money laundering and terrorist financing. Further regulation for the crypto sector has yet to be developed.

BCP told Bloomberg that it is its duty to “notify the relevant authorities if it sees ‘suspicious transactions’ which may result in the termination of banking relationships with certain companies.”

A spokesman for Santander added that the company generally acts “according to its perception of risk” and that the decision to close, open or maintain accounts depends on “a number of factors”.

CriptoLoja was quoted as saying that it has always followed the prescribed money laundering protocols, adding:

“We are now dependent on using accounts outside Portugal to operate the exchange.”

Mind the Coin claimed that its own accounts were closed earlier this year and that its efforts to open accounts with other domestic lenders were also unsuccessful. Luso Digital Assets reported a similar situation.

Pedro Guimaraes, the founder of Mind the Coin, was quoted with regret:

“Although there is no official statement, some banks simply tell us that they do not want to work with crypto companies. It is almost impossible to start a crypto company in Portugal right now.”

As recently as April this year, tax lawyers in Spain reported that Spaniards with crypto holdings were “fleeing” to Portugal to avoid taxes on their token-related profits. They warned that Spain is on the verge of becoming a “crypto desert” as the country tightens its regulation of the sector.

But in Portugal the mood has now changed and the government now seems determined to regulate. Two bills calling for the imminent introduction of a crypto tax were defeated in parliament in May, but both came from smaller opposition parties. The ruling party is likely to formulate its own bill, which some believe will soon find its way to the Republic Assembly.

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