Bitcoin Broker Prasos Loses Banking Partners

Bitcoin broker Prasos has revealed that four banks in Finland have terminated services with the company, citing money laundering fears as the main reason.

Founded in 2012, Prasos is a bitcoin service provider in the Nordic countries. It focuses on the exchange of cryptocurrencies and asset management. Prasos claims to have more than 50,000 customers with a total exchange value of €80 million ($95 million USD). The company also claimed that it is handling €8 million ($9.5 million USD) in transactions per month. Revenue consists mainly of exchange commissions.

Henry Brade, Prasos’ chief executive officer, said four Finnish banks – S-Bank, the Op Group, Saastopankki, and Nordea Bank AB – have already stopped the company’s transactions because of fears that Prasos might be breaching money laundering rules. He added that the company has been left with only one bank to handle all client money transactions.

The company can still receive funds in its account at POP Bank. But Brade still has concerns: “The risk is that we’ll see our last bank account closed before we can get the next one opened,” he said. “That would freeze our business.”

Brade said the sudden growth of its transaction volumes to about 150 million euros ($185M USD) last year, almost ten times the volume a year earlier, also became a subject of concern among the banks.

“We’ve realized that the growth in international transaction volumes started to disturb the banks,” Brade said. “Along the way, we’ve been given very little information by the banks on what we could do to solve the problem.”

In December 2017, a political agreement was reached in the European Union (EU) to extend rules on preventing money laundering to entities dealing with cryptocurrencies. These rules include financial institutions requiring both the customer’s name and the source of the money.

Tomi Narhinen, CEO of Saastopankki, said that the anonymous character of crypto operations breaches the AML laws of the EU).

“In most cases it’s practically impossible or at least very hard to do business with cryptocurrency dealers and exchanges, because it can be impossible to determine the origin of the funds,” said Narhinen.

Brade said that Prasos has sought to take greater steps to ensure regulatory compliance. “We’ve created identification practices, which we have taken into use in March, and they comply fully with anti-money laundering laws and regulations, even though authorities do not even require this from us as our business in not under regulatory obligations,” he said.

Hanna Heiskanen, a senior adviser at Finland’s Financial Supervisory Authority (FSA) in Helsinki, said that cryptocurrency trading places are not currently under the regulatory mandate of the Finnish FSA and that Prasos’ troubles are “an affair between the company and the banks.”

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