If you own a Bitcoin ATM business, then you know how difficult it is to find a reliable Bitcoin bank. When you finally secure a bank account, your financial partner may be in the next county or even the next state. In some cases, your only option is across the country. This leaves you with a myriad of other problems to solve like how to rotate cash through your operating account so that it’s available at your ATM locations when it’s needed by your customers. Keep reading to learn why Bitcoin bank accounts are hard to secure and how BankLine’s Bitcoin banking solution can keep your business up and running.
Regulators and law enforcement agencies are cracking down on financial fraud on a global scale. Governments are working across borders to bring down financial criminals and there are fewer and fewer places to hide. This world-wide momentum is strengthened by an increasing willingness on the part of regulators to enforce laws across borders. FinCEN demonstrated this willingness when they worked to arrest and fine Russian national Alexander Vinnik for his involvement with digital money transmitter BTC-e.
The US regulatory body worked with the US Attorney’s Office of Northern California and international law enforcement agencies to arrest Vinnik in Greece and secure his extradition to the United States. Vinnik is charged with laundering billions of dollars using virtual currency. BTC-e is under further investigation for facilitating transactions involving identity theft, tax fraud, drug trafficking, and other illegal activity. This case shows that regulatory bodies are willing and able to cross borders in the name of detecting, preventing, and prosecuting financial crime.
Banks are taking note of this increased regulatory reach. Their response? Deny banking services to Bitcoin-related businesses. Instead of mitigating the risk with strong compliance programs and technology, they are opting to shed the risk entirely. This leaves a growing, fast-paced industry without a reliable banking solution. As Bitcoin ATMs experience rapid growth, many kiosk operators are forced to put their business plans on hold as they search for a financial partner. This denial of banking services is holding back Bitcoin-related business owners from scaling as Bitcoin enters the mainstream.
Regulators are also sending mixed signals when it comes to Bitcoin. These contradictory messages are giving banks even more pause. As a part of the body of regulation that has shaped the financial sector since the Bank Secrecy Act of 1970 (BSA), banks are now required to “know their customers.” Know Your Customer (KYC) requirements are designed to help financial institutions identify and track customers in order to detect and eliminate fraud.
These requirements are passed onto the next round of customers as well. For a money service business or Bitcoin ATM, this means that banks need to be able to identify your clients. Since Bitcoin is by nature anonymous, thanks to the blockchain technology on which it runs, identifying the user isn’t possible. Other steps, however, can still be taken to facilitate compliant Bitcoin transactions. BSA and Anti-Money Laundering (AML) guidelines can and should guide your Bitcoin business compliance program.
Another thing regulators are grappling with is tax evasion. Since there is currently no place to declare cryptocurrency on a US tax return, individuals are trusted to record any income received from digital currencies on their own volition. The anonymous nature of cryptocurrency makes discovering undisclosed assets even trickier. As regulators figure out how to address issues like this one, Bitcoin-related businesses and Bitcoin banks need to be flexible and ready to adapt to new and changing rules.
Bitcoin and blockchain technology both support financial inclusion by offering an alternative to the often expensive and discriminatory traditional financial system. As a decentralized currency that isn’t government-controlled, Bitcoin offers financial freedom to those who are denied banking services. In developing countries, individuals are using Bitcoin to store money and transfer funds between family and friends.
As a part of mainstream life, Bitcoin offers a convenient and secure way to send and receive money and pay for goods and services. Blockchain technology is virtually unhackable, which is a welcome feature in time of increasingly regular online data and privacy breaches. This innovative technology is also being adopted across the financial industry to encrypt transactions and ramp up security in the digital age. In addition to security and innovation, Bitcoin provides a quick and cheap way to transfer money.
Bitcoin is a truly international currency, moving across borders with ease. The cryptocurrency is accessible since it lives outside the often exclusive world of traditional central banking. The decentralized nature of Bitcoin also opens up the field for additional competition. We’ve certainly seen this with an influx of new digital currencies. These alternatives creates a healthy and competitive marketplace where digital currency companies are motivated to offer the very best and integrous coin-based system possible.
In the face of evolving regulation and bank derisking, BankLine offers a Bitcoin bank solution for Bitcoin ATM and kiosk operators. Finally, you can scale your business with peace of mind. BankLine maintains a strong network of multiple Bitcoin-friendly banks. These financial partners provide real Bitcoin bank accounts and supportive banking services to BankLine’s clients. In the event of derisking, the redundancy of the network ensures that your Bitcoin business always has a bank account.
BankLine’s team of Bitcoin compliance experts stays ahead of regulators and industry trends to help you create and maintain a world class compliance program. Bitcoin industry experts are available 24/7 to help you solve business issues. In addition to Bitcoin business bank accounts and compliance expertise, BankLine offers nationwide cash logistics. Through TransGuardian, Rapid Armored, and the United States Postal Service, BankLine can pick up and drop off cash at any USPS location in the United States.
Bitcoin cash logistics takes your Bitcoin banking to the next level and allows you to capitalize on the growing popularity of digital currencies. With BankLine, you no longer need to worry about finding a Bitcoin bank or arranging for armored cash delivery!
BankLine is the only crypto-friendly banking solution that offers a portfolio of redundant cryptocurrency-friendly depository institutions willing to serve the varied needs of the crypto industry. Our network of crypto-friendly banks and services helps protect from the threat of bank discontinuance.
BankLine provides banking services to cryptocurrency companies operating within the United States and its territories.