First National Bank (FNB), one of South Africa’s top 5 banks has notified owners of cryptocurrency-related accounts that their bank accounts will be closed soon.
FBN is a banking partner of major South African exchanges including Luno, VALR, and ICE3X. According to documents making rounds on the internet, First National Bank informed exchanges that due to the “risk appetite” associated with the industry it has decided to shut down some bank accounts.
An extract from the letter reads:
“FirstRand Bank has been considering its risk appetite in respect of virtual currencies and virtual currency exchanges for some time.
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.“
FirstRand Bank is still open to providing its services for cryptocurrency-related companies in the future provided regulation on the industry is clarified.
Response From SA Exchanges
Luno, one of the biggest exchanges in South Africa has responded with a statement. In the statement, Luno revealed that their account is scheduled to be closed in 2020 and all users can still make bank deposits through their integrated Standard Bank account.
We can confirm that Luno, along with other similar businesses, is affected by this decision. This means that FNB may be closing our business bank account in the second quarter of 2020…..
Customers with FNB accounts will be able to deposit into Luno’s fully integrated Standard Bank account.
On the other hand, VALR has added Standard Bank as a new banking partner and has seen more users sign up after the FNB news according to their latest tweet.
ICE3X also released a tweet informing users that the account closure will not affect the end-user in any way.
From the look of things, despite the fact that several big exchanges have been affected by FNB’s decision, it will have very minimal effect on trading cryptocurrencies in the country.
South Africa continues to be the biggest market for exchanges in Africa, as companies like Paxful are recording immense growth in Africa’s 2nd largest economy.