Bitcoin has long been accused that it is a tool for money laundering; in fact, Charlie Schrem of the Bitcoin Foundation even pleaded guilty for the same crime. Now, the shadow is also reaching to HSBC which according to a source at Global Advisors, known as one of the world’s first regulated Bitcoin investment funds, has snapped ties with it.
According to the source from the Global Advisors, HSBC recently severed ties with the fund due to concerns related to money laundering. Nonetheless, the Global Advisors Bitcoin Investment Fund (GABI) which is located in Jersey, is definitely disappointed as it was a big deal that could have taken the digital currency to the next level.
GABI which has become known as a Bitcoin-friendly jurisdiction over the course of 2014 is feeling disappointed from the decision by HSBC, the company for which money laundering charges are not new though. For instance, it was forced to pay a nearly $2 billion fine in 2012 due to allegedly laundering money for South American drug cartels.
Nonetheless, showing his disappointment about the decision GABI’s Daniel Masters said that the decision from HSBC is a “step in the wrong direction.” He admitted that the development threatens well publicized plans to make Jersey a global centre for digital currencies, and according to him both his firm and the Bitcoin fund are tightly regulated.
HSBC is Though Not New to Money Laundering Charges
The States of Jersey has been quite proactive and created a company called Digital Jersey, in part to foster financial technology. Also, Island politicians have travelled to Bitcoin conferences to promote Jersey’s enthusiasm for digital currencies. Nonetheless, the Global Advisors Bitcoin Investment Fund was another attempt towards the same goal.
The decision has surprised GABI people as according to them Jersey is one of the least regulatory burdensome jurisdictions in the world when it comes to Bitcoin, and the nation is hoping to become a hub of Bitcoin-related innovation in the coming years. Surprisingly, HSBC is not new to money laundering charges as well.
GABI partnered with HSBC as none of the banks on the island of Jersey were willing to work with a Bitcoin investment fund. Despite all this bitter development, HSBC is not willing to comment on the official reasoning behind the shutdown of GABI’s accounts; however, it has noted that it does not take the commercial decision to end a customer relationship lightly.
To contact the reporter of this story: Deepak Tiwari at email@example.com