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Barclays no longer banking Cryptocurrency exchange Coinbase - sources

Barclays no longer banking Cryptocurrency exchange Coinbase - sources
FILE PHOTO: Traders work on the trading floor of Barclays Bank at Canary Wharf in London, Britain December 7, 2018. REUTERS/Simon Dawson/File Photo -
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Simon Dawson(Reuters)
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By Tom Wilson and Lawrence White

LONDON (Reuters) – Barclays <BARC.L> is no longer providing banking services to cryptocurrency exchange Coinbase, sources familiar with the matter told Reuters, ending a relationship that started in March last year as the exchange expanded in Europe.

The rare deal between the San Francisco-based exchange and the British bank made it easier for Coinbase users to buy cryptocurrencies with pounds and withdraw their funds.

Barclays declined to comment, while Coinbase did not immediately respond to a request for comment.

Large global banks have been reluctant to do business with companies that handle bitcoin and other digital coins because of concerns they are used by criminals to launder money and that regulators will soon crack down on them.

Three-quarters of cryptocurrency businesses in Britain are forced to bank overseas due to the difficulty of getting banking services onshore, a survey by industry body CryptoUK reported last month.

The exchange’s chief executive for the UK, which is Coinbase’s biggest European market, said in March 2018 that the deal with Barclays had taken some time to sign because the bank needed to be sure that Coinbase had the right systems in place to prevent money laundering.

Cryptocurrencies are largely unregulated in Europe, but Coinbase is licensed to provide fiat currency-related services across 23 EU countries. Many customers deposit fiat money – currency that a government has declared to be legal tender – at Coinbase before buying and selling cryptocurrencies.

While big banks remain reluctant to become too closely involved in the plumbing behind the global crypto market, large companies and venture capital funds are pouring money in, Reuters reported in April.

(Reporting By Tom Wilson and Lawrence White; Editing by Stephen Powell)

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