2018 has not started well for Bitcoin as the cryptocurrency started the year with 2 weeks of losses and last week we had four days of straight losses from Monday to Thursday.
Shock News for Bitcoin Banking
The year started off with a shock as Visa suspended a number of prominent cryptocurrency card providers without any notice, leaving some customers without cash. Some of the well-known companies affected were Cryptopay, Bitwala, Xapo, Bitstamp and many others. Bitwala also reported that their bank facilities were suspended with immediate effect.
It was also reported yesterday that Metropolitan Bank has suspended banking services to cryptocurrency business which will put further strain on an embattled industry.
It was also reported that US Treasury Secretary Steven Mnuchin indicated that an international effort to control and manage transfers in cryptocurrency could be forthcoming.
From Cointelegraph: Metropolitan Bank Halts all Cryptocurrency related wire transfers
Regulation has landed some heavy blows on Bitcoin with China banning ICO’s and then also banned exchanges.
It was reported by Bloomberg this morning that China is escalating its clampdown on cryptocurrency trading, targeting online platforms and mobile apps that offer exchange-like services, according to people familiar with the matter.
Bloomberg further reported that Authorities will also target individuals and companies that provide market-making, settlement and clearing services for centralized trading, the people said, asking not to be named because the information is private. Small peer-to-peer transactions aren’t being targeted, they said.
Full story Bloomberg: China is said to escalate crackdown on cryptocurrency trading
In another shock move the South Korean Ministry of Justice announced that they would be banning trading in cryptocurrency, fortunately, this was done without the consent of the other government agencies involved in the South Korean cryptocurrency regulation task force and the matter has to be cleared up by the Blue House, the executive office and official residence of the South Korean President.
According to a spokesperson from the South Korean cryptocurrency task force, there are no plans to ban cryptocurrencies.
On the the other side of the US, especially the SEC, has taken steps against a number of ICO’s and the Commodity Futures Trading Commission Chairman J. Christopher Giancarlo took up the mantle of federal overseer of digital currencies.
It seems that regulation is driven by fears of money laundering and the use of cryptocurrencies for other fraudulent or criminal uses.
An Industry under siege
The extent to which the industry is affected was made clear in an email that Bitwala sent to customers after the Visa card shutdown.
What actually happened
The prepaid card program was shut down
In offering the Bitwala cards, we had come to rely on WaveCrest, a card issuer with a Visa license. Last week, WaveCrest was forced to disable all of its cards overnight due to its noncompliance with Visa’s rules. This meant that all customers with a Visa card issued by WaveCrest, which includes many other companies, also had their cards disabled.
Many of you have reached out to us asking about refunds and we have published an update on the matter. WaveCrest will be handling your refunds and we are working closely with them to make sure your funds are 100% safe and returned to you quickly.
Our bank ended its relationship with us:
On December 29th our bank notified us that our account was being looked into and in the interim all transfers will be disabled. We disabled bank transfers from our dashboard and emailed users with pending transactions to expect delays.
After doing everything possible to restore our account, the bank informed us yesterday that due to a change in their policies, they have decided to terminate our relationship and that the closure would be permanent.
Further, in their email, they say:
Countless crypto companies have had to shut down because of lack of access to financial services. This fear of banks pulling the plugs on anything crypto-related is very real and is a fear that our industry lives in.
The Blockchain Bank – Bitwala fights back:
It is clear that the Bitcoin industry is not going to take these blows lying down and Bitwala came out fighting earlier this week with their vision for the crypto market.
According to the Bitwala website: – We want to empower people to exchange value like they exchange ideas. Globally, instantly & at lowest possible cost.
You can learn more about the planned Blockchain Bank and the vision of Bitwala in the video below.
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