Shortly after the newly founded Norges Bitcoinforening opened an account with Norway’s largest bank, the company received notification its account would be terminated.
DNB ‘Cannot Be Confident’ in Bitcoin-Related Account
Norges Bitcoinforening (Norway Bitcoin Association), “an organization for everyone who cares about Bitcoin and other cryptocurrencies,” opened an account with DNB in August. It intended to use the account for collecting donations from members to maintain operations.
But after three weeks as a business customer, DNB suddenly had a change of heart. The bank notified Bitcoinforeningen it would pull the plug on its account.
DNB cannot be confident that the organization’s money has no connection to money laundering or terrorism.
The organization had only 832 kroner in the account and most of its members paid their dues in Bitcoin, the organization noted. Thus, members sent funds directly to the organization’s Bitcoin wallet — and here lies the problem.
The Please Explain Letter
On September 5th, DNB sent Bitcoinforening a letter asking about the account’s intended use, and to confirm that members can pay with BTC. The organization replied they indeed can, through online payment provider Stripe. The next day, the bank informed Bitcoinforening of the account’s termination in 14 days. The bank warned that the account owner must withdraw all funds before the termination date.
“DNB believe that we are doing something suspicious,” Bitcoinforening manager, Stephan Nilsson, told E24. “We have asked for reference to which of their rules we broke, but have not received a reply.”
Meanwhile, Nilsson has gained “some access” to the account. A bank representative also questioned him about Bitcoinforening’s objectives how it would use the bitcoin. They asked Nilsson to clarify the number of safeguards, including how the organization verifies members’ identities and how it prevents ties to illegal activities.
Following that, the representative cited the Penal Code’s Section 317 dealing with “receiving of the proceeds of a criminal act”, reiterating that DNB must be confident the money is not involved in money laundering or financing of terrorism.
Although DNB never told Nilsson exactly which DNB guidelines it had violated, the bank wrote:
We reviewed our customer portfolio and saw that their company receives payment with Bitcoins, which has the characteristics of a tool that can be used for offenses covered by the Penal Code § 317, including money-laundering and terrorist financing.
Strangely, the online payment processor Stripe is far from an obscure web service. The US-based fintech company operates in 25 countries and processes payments for internet giants like Twitter.
Bitcoin is also seven years old and few these days consider it ‘funny money’ for cyber-criminals and terrorists. Therefore, Nilsson believes that DNB is exhibiting what he calls “monetary xenophobia.”
Moreover, last year’s study by the UK Treasury revealed Bitcoin and digital currencies hold the very bottom positions for money laundering risk. Interestingly enough, banks and accountancy services hold the places with highest potential for money laundering.
“DNB should check its own house,” Nilsson adds. “Since they have bank branches in the Cayman Islands and Luxembourg, there is reason to suspect they are involved in money laundering and tax evasion.” He concluded:
Now we’ll switch to another bank that knows what Bitcoin is. There are many banks that have a more updated approach to Bitcoin, and we do not want to be a customer of DNB any longer.
Why do you think DNB really terminated the account? Let us know in the comments below!
Images courtesy of norgesbitcoinforening.no, shutterstock, shippingherald.com
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