South Africa’s First National Bank (FNB) Terminates Services for Crypto Exchanges

Wilfred Michael 

Wilfred Michael

News reporter

19 November 2019,
20:26
South Africa’s First National Bank (FNB) Terminates Services for Crypto Exchanges

First National Bank (FNB), one of the five largest banks in South Africa, has terminated bank accounts that cryptocurrency exchanges hold with them and also revealed it would not provide further services to the emerging industry.

Per a report by local news agency, MyBroadBand, the bank notified the affected exchanges – including Luno and ICE3X– via a letter this week, citing a low ‘risk appetite’ to continue providing services to the exchanges.

FNB reportedly said it had weighed its engagement with virtual currencies and related exchanges and concluded that it would terminate services for associated companies, pending further regulatory clarification on the matter.

MyBroadBand cites a section of the letter sent to exchanges as confirming that the bank has taken some time to make the decision, further adding:

Within this context, the bank has taken the decision to discontinue the provision of banking services to virtual currency exchanges and/or entities dealing/trading in virtual currency. Future regulatory clarity may cause us to revise our decision.

Meanwhile, the report goes ahead to note that although the termination of services by FNB was unexpected, it will have no significant effect on local cryptocurrency exchanges as they still maintain other banking relationships.

In fact, representatives of both Luno and ICE3X who labeled the move by FNB as not entirely new confirmed in the report that users could still use any of the banks that still support deposits and withdrawals to their respective platforms.

Luno Africa general manager Marius Reitz on his part acknowledged that fractured banking relationships remain “one of the biggest challenges crypto companies face globally,” as the regulatory landscape gets clearer.

Meanwhile, in the case of South Africa, Stmarket.co had reported that the country’s central bank introduced proposed regulations for the industry back in January, perhaps suggesting that the needed regulatory clarity will come sooner rather than later.

 

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