02 October 2014

BMO closes the door on bitcoin businesses

19 February 2014  |  3663 views  |  0 Bitcoin

Bank of Monetral is closing all bitcoin-related business accounts across Canada in the wake of hostile comments from government ministers on the threats posed by emerging crypto-currencies.

BMO's move to distance itself from bitcoin businesses was revealed by Vancouver-based exchange Cointrader.

"We were informed this morning by our bank that the last remaining Bitcoin-friendly charter bank, Bank of Montreal, is closing all Bitcoin-related business accounts across Canada," explains Cointrader co-founder and CTO Paul Szczesny. "Despite the fact that Cointrader has already implemented an anti-money laundering regime to comply with potential Fintrac regulations which was vetted by BMO itself, the bank has decided to sever our account as well."

Szczesny blames the decision on recent statements by Canadian finance minister Jim Flaherty, who singled out bitcoin as a threat to financial stability.

"It is important to continually improve Canada's regime to address emerging risks," said Flaherty, "including virtual currencies such as bitcoin, that threaten Canada's international leadership in the fight against money laundering and terrorist financing."

The removal of bank support is a crushing blow for Cointrader, which earlier this week announced plans to locate new bitcoin ATMs in Singapore and London. The firm - which has grown from a three-person operation to a business employing ten staff in less than six months - is also working on POS systems, secure storage, and a hardware project.

"As a result of these recent events, we are being forced to consider relocating our headquarters to a more innovative jurisdiction where dubious fear-mongering does not pre-emptively close doors on the entrepreneurial spirit," says Szczesny. "If Canada continues it's negative stance, and chooses not to help this thriving economy grow in accordance with the law, then we will be forced to relocate to more forward-thinking economies which are able to encourage innovation while also effectively deterring criminal behaviour."

In the interim, he says, the business will continue operations as normal as it explores alternative banking arrangements. "We do not expect any downtime," says Szczesny.

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