Hannah Murphy and Chloe Cornish A major bitcoin exchange has struck a banking relationship with Barclays, a move that marks a break in the ranks of UK lenders who have been shunning the cryptocurrency industry as it comes under growing scrutiny from regulators. San Francisco start-up Coinbase, one of the better-known digital wallet providers and owner of GDAX, a top 10 exchange by volume, said on Tuesday that its UK subsidiary had secured a bank account with the British bank.
The deal will simplify the process of deposits and withdrawals for Coinbase’s UK customers, who have previously had their transactions processed through an Estonian bank. The partnership, the first of its kind to be announced with a major British bank, comes as regulators circle the hundreds of cryptocurrency exchanges springing up to cater to demand for digital asset markets, many of which are unregulated.
The US Securities and Exchange Commission is increasingly warning that many digital tokens traded on exchanges act like securities, which would place those exchanges under its mandate. Earlier this month, Japan temporarily suspended two cryptocurrency exchanges, and Mark Carney, governor of the Bank of England, said trading on cryptocurrency exchanges should be regulated in a similar way to securities trading.
Many banks have shunned relationships with start-ups that handle cryptocurrencies such as bitcoin, concerned by their perceived links to crimes from money laundering to terrorism financing. Instead, most European exchanges bank with lesser-known private lenders in countries more welcoming of cryptocurrency fintech, such as Gibraltar and Poland.
Zeeshan Feroz, Coinbase’s UK chief executive, said the company already had an existing relationship with an Estonian bank but wanted to work with a UK bank to give British users “a more familiar experience”. Founded in 2011, Coinbase attracted a barrage of complaints from customers during last year’s cryptocurrency trading frenzy, over service outages and slow fund withdrawals. Read more from ft.com…
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