Crypto business bank account

Crypto business bank accountSpecialists of international banks & international accounts would like to share their experience in opening a bank account in Europe for companies that conduct cryptocurrency transactions. If your company is engaged in cryptocurrency activities and you are interested in opening a bank account in Europe, then you should know that this is a rather time-consuming process. Despite the fact that every year the number of companies whose activities are directly or indirectly related to cryptocurrency is steadily increasing, the difficulty of opening bank accounts still exists. This problem is faced by companies both directly working with cryptocurrencies and digital assets, as well as any traditional business that receives payment for its goods/services in cryptocurrency.

Why are most banks not willing to work with crypto-assets?

Practice of recent years demonstrates that entrepreneurs who have decided to launch a cryptocurrency project face serious challenges in opening an account with banks in Europe. The main reason is that the cryptocurrencies has not yet been fully regulated at the legislative level in many European countries. This is the main reason why banking institutions refuse to cooperate with companies engaged in cryptocurrency transactions – there is no clear regulations approved by the regulator on how to control cryptocurrency activities and what class of assets/values the virtual currency belongs to. In general, most banks and financial institutions classify the cryptocurrency business as a high-risk activity.

Although some banks work with cryptocurrency-related businesses, they tend to choose their clients by working only with easy-to-understand business models and well-established companies. Thus, opening an account for cryptocurrency-related business becomes even more challenging for innovative business models, such as mining, stacking, investment portfolio management, cryptocurrency loans/credits, etc.

Nevertheless, some innovative European countries have already accepted this technological progress and introduced laws, according to which cryptocurrency activities are regulated at the state level and considered legal. You can see below an up-to-date list of the countries from IB-IA Group UAB banking experts.

How to open an account for a cryptocurrency company?

First, our company recommends to choose a European country with an effective regulation of cryptocurrencies and to choose a cryptocurrency-friendly bank or financial institution in this country (payment service provider, electronic money institution, etc.). What points should be considered at this stage:

  • Does the bank allow receiving and sending money between cryptocurrency accounts?
  • Does the bank allow an account to be used for a cryptocurrency-related business?
  • Is it possible for this European bank/financial institution to accept and send assets to cryptocurrency exchanges?
  • Does the bank serve companies with a similar business model?
  • How much is it for the bank to mention crypto in the payment description?

Only when you know for sure that the European bank you choose works with your business model should you consider applying for a cryptocurrency account. It is also important already to understand on whether the chosen financial institution offers the full range of services required, including:

  • International SWIFT payments;
  • Debit cards;
  • Card issue or virtual IBAN;
  • Multicurrency;
  • Account opening and closing fees.

While the number of financial institutions serving cryptocurrency businesses is growing, not all of them offer the full range of services a business needs. Many European banks only offer a SEPA (Single Euro Payments Area) payment account, while virtual currency companies usually want to open a cryptocurrency account and get a full package: SWIFT payments, multi-currency accounts and payment cards. In order to save our clients’ time and receive all necessary banking services for cryptocurrency business, IB-IA Group UAB offers Pre-approval service, which is a unique opportunity to receive a preliminary consent or refusal from the banks carefully selected for you by our specialists, to consider a full package of documents for opening an account for your cryptocurrency company.

Another responsible step is to take the right approach to the application. When applying for an account for a cryptocurrency company, you must provide all necessary information in full: all corporate documents of the company, copies of passports of beneficiaries, contracts with customers and suppliers and a brief description of the business model. If your business is regulated, you need to attach a proof of a license. The fact that the documents must be submitted in a form acceptable to the country of registration of the financial institution is often overlooked. This means that many documents must be translated into English or the language of the European country where the bank is registered and regulated, and notarized and apostilled in order to provide a proof that the documents are valid.

Today, every company is also required to have anti-money laundering procedures, so, internal AML procedures, due diligence reports and possible external audits must be specified. When planning to open an account for a cryptocurrency company in a European bank, note that because cryptocurrencies are considered riskier assets, this means that the banks need to conduct enhanced due diligence (EDD) under anti-money laundering laws. The basic requirement is to understand a source of funds and a source of wealth of the company and its ultimate beneficial owners (UBO).

All the documents relating to the source of funds of the company or its UBO must be verified. Part of the EDD process also includes analysis how the company collects and manages the customer data. Before opening an account for the company activities, which involve cryptocurrencies, it is important for bank officials to ensure that the company has developed processes to identify the risks associated with potential money laundering and that these processes have been properly implemented as specified in the anti-money laundering guidelines. In order to avoid repeating the procedure of preparing a full package of documents at an early stage, our company offers you a pre-approval service. You can get a preliminary consent of the selected European bank to open an account for your cryptocurrency company by providing only the initial package of documents, then you can prepare the missing documents beforehand, having obtained a consent of the bank.

Which European countries are the best for opening an account for a cryptocurrency company?

Jurisdictions that regulate cryptocurrency business and provide a legal basis for such a business include such countries as: Great Britain, Liechtenstein, Switzerland, Gibraltar, Germany, Netherlands, Lithuania, and the Czech Republic.

GREAT BRITAIN

Company registration for crypto activities in the UK is administered by the Financial Conduct Authority (FCA). The FCA has developed and implemented KYC, AML/CTF regulations and policies specifically for crypto assets. The FCA has introduced requirements for Virtual Asset Service Providers (VASP) given their freedom to promote innovation. As for opening a cryptocurrency account in the UK, there are cryptocurrency-friendly banks in the country that allow customers to use their issued credit and debit cards to freely buy and sell cryptocurrencies, make bank transfers to crypto exchanges, and withdraw assets from crypto investments.

GIBRALTAR

In Gibraltar, activity of cryptocurrency companies is regulated at the state level and it is possible to open an account in one of the financial institutions of Gibraltar. This country is considered one of the leaders in cryptocurrency regulation both in Europe and in the world. Cryptocurrencies are not recognized as legal means of payment here, however, exchange of virtual currencies is regulated at the legislative level. The country is characterized as a low-tax jurisdiction, therefore, after registering a cryptocompany in Gibraltar, capital gains or dividends will not be taxed. You should bear in mind that local banks are quite selective about companies wishing to work with cryptocurrency, and only a few of them work with such clients. In order to open a bank account for cryptocurrencies in Gibraltar, it will be necessary to confirm that you have a local physical office and that the company employs local employees.

GERMANY

Cryptocurrencies in Germany are treated as financial instruments in accordance with the local law. In July 2021, new licensing requirements for cryptocurrency companies in Germany were adopted and, under the new regulatory mode, cryptocurrency business in Germany is highly regulated and must be carried out in compliance with the Anti-Money Laundering Law. It has also become possible to open a bank account for companies that are engaged in cryptocurrency transactions.

SWITZERLAND

Foreign investors who want to enter the cryptocurrency market in Europe often focus on Switzerland. The country, in particular, its canton of Zug, is called the European crypto valley. Cryptocurrency regulation requirements in Switzerland are strict. But Swiss banks are still quite cautious with the customers whose activities are related to cryptocurrencies. There are not many institutions in the country that provide an opportunity to open an account for a cryptocompany. The exceptions are Falcon Private Bank, which accepts cryptocurrency investments, and Swissquote Bank and IG Bank, through which Bitcoin can be traded. Also recently, the Swiss bank Hypothekarbank Lenzburg (Hypi) announced that it would provide an opportunity for foreign investors to open accounts for working with cryptocurrency. In all of these institutions, applicants will be subject to a thorough KYC check. Those who plan to open a cryptocurrency account in Switzerland will need to confirm an appointment of a resident director, presence of a local office and local staff.

MALTA

The Maltese government has developed clear regulations and requirements for regulation of cryptocurrencies in Malta. In particular, these rules have affected the regulation of cryptocurrencies and ICO, certification of blockchain-based platforms, and licensing of technology service providers. A special body for control the digital innovation has also been created. Prior to introduction of these rules and regulations, Maltese banks often refused to open an account for a crypto company. After the local legislation has been transformed, it seems possible to open an account on a crypto exchange in Malta, but only if a local company is registered. It is worth noting that Malta has become one of the first jurisdictions where cryptocurrency related activities are fully regulated and legal.

LIECHTENSTEIN

Liechtenstein has been considered one of the leading jurisdictions for registering crypto businesses in Europe since 2018. The government of this country has developed effective laws to encourage foreign investment of crypto-companies in order to compete with such states as Switzerland. Today, launching a crypto-startup in Liechtenstein can be a profitable solution for many foreign investors, as the fintech industry is developing quite rapidly. You can open a cryptocurrency account in Liechtenstein in several banks. But it must be taken into account that each client undergoes a thorough check and is considered individually, according to the strict rules of the institutions.

LITHUANIA

Currently, Lithuania is becoming one of the most cryptocurrency-friendly and attractive jurisdictions in the European Union, where legal transactions with cryptocurrencies are possible and clear requirements have been developed regarding regulation of crypto-currency business by the Financial Crime Investigation Service (FCIS). The legal framework is regulated by the Money Laundering Prevention Act. The government regulates cryptocurrencies in Lithuania within the Fifth EU Anti-Money Laundering Directive (AMLD 5). The Central Bank of Lithuania launched its first digital currency LBCOIN in early 2020. As a consequence, the country has become more cryptocurrency-friendly than ever before, with more banks offering cryptoaccounts in Lithuania.

GEORGIA

Launching a crypto startup in Georgia is one of inexpensive solutions if we consider European countries. This state is on the list of countries that are being considered for cryptocompany registration in Europe. The government has developed a favourable tax policy for such companies; among other things, sale/exchange of cryptocurrencies is not subject to VAT. There are a number of banks in this country that cooperate with crypto projects. But before opening an account for crypto activities in Georgia, please note that cooperation of local banks with persons whose activities are related to virtual currency is limited only to exchange, purchase and sale of cryptocurrencies.

Opening an account for crypto activities in a payment system is another affordable option for owners of cryptocurrency companies. Each payment system, like a regular bank, has a number of individual conditions and requirements, including a list of jurisdictions with which it does not work. We cannot absolutely guarantee opening of an account for crypto activities, but our specialists are ready to help reduce the risks of failure to a minimum and we will take care of all the organizational aspects of this process.

As we can see, although many countries are developing a clear regulatory framework for regulation of cryptocurrencies, only a few banks are willing to work with such companies. IB-IA Group UAB specialists provide support in opening an account in European banks for cryptocurrency companies and will be happy to provide you with the full range of services you need.