South Africa’s First National Bank (FNB) Shuts Down Accounts for Crypto Exchanges

In what is evidently a blow to the fast-growing crypto ecosystem in South Africa, one of the country’s big ‘five banks’ disclosed today that it will no longer offer its services to cryptocurrency exchanges.

First National Bank (FNB), according to the local news agency MyBroadband, made their decision known via a letter that they sent to cryptocurrency exchanges, including Luno and ICE3X, that the bank would no longer provide services to crypto-related companies.

FNB related that the decision comes as off the back of serious consideration of its “risk appetite” for crypto-related activities, but promised to review the ban if regulations around the emerging industry become clearer in the future.

An excerpt of the letter purportedly seen by MyBroadband 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.

Sharing his thoughts on the development, Luno Africa general manager Marius Reitz told the news agency that the ban by FNB isn’t the end of the road for the exchange and should have to impact on their customer base as they still maintain other functional banking relationships.

ICE3X, another of the affected exchanges, shared the same sentiments as Luno while also expressing optimism that more precise regulations for the operation of the South African crypto industry would be provided in due course.

While the latest development is not expected to affect operations at the affected exchanges significantly, the fact remains that one of the ‘big five banks’ in South Africa closing its doors to crypto exchanges could pave the way for others to follow.

What could perhaps be the way forward is for the country’s central bank to finalize its reported development of regulation for the crypto industry, a situation that will reinstate the relationship of crypto exchanges with banks like FNB.