Trouble is brewing for cryptocurrency enthusiasts in South Africa. It appears the FirstRand Bank is currently closing bank accounts of exchanges out of the blue.
FirstRand Bank is one of the bigger financial institutions in South Africa today.
FirstRand Bank Shuns Crypto Firms
It was also one of the few banks willing to provide services to numerous South African cryptocurrency exchanges in the past.
That situation has now come to change, as Luno, ICE3X, and VALR will all have their accounts closed in the very near future.
All of the companies were told the bank has become less risk averse regarding virtual currencies and the platforms facilitating the trading of these assets.
At this time, the bank will discontinue the provision of services to very specific companies, particularly those involved in cryptocurrencies and virtual currencies.
Although these changes will only go into effect in March of 2020, it is far from an ideal situation for all of the affected exchanges.
Thankfully, it appears most of the South African exchanges will not suffer much from this development, as they have other banking relationships in place.
The decision by FirstRand Bank remains very curious, considering South Africa has no active regulatory measures regarding digital currencies.
Until a proper framework is established, there may be other financial institutions taking such measures against exchanges.
It is not the first time banks decide to shun cryptocurrency service providers either.
This unhealthy trend of closing bank accounts willy-nilly has gone on for several years in multiple countries.
A global approach to regulating cryptocurrencies and digital currencies might be needed to ensure such bank closures cannot occur in the future.