South African Bank Processing Termination Procedures for Crypto Businesses

South African bank, Standard Bank, one of South Africa’s largest banks, has sent clients who offer automated cryptocurrency arbitrage notices terminating their accounts.

Bank Criteria Baffling

According to a Mybroadband Report, caused shock waves in the cryptocurrency industry. Standard Bank’s criteria for deciding which accounts should be closed has been questioned by the recipients of the notices.

Carel de Villiers is the co-founder and chief executive of Shiftly arbitrage trading company. He is quoted as questioning Standard Bank’s use of the formula. De Villiers acknowledges that Shiftly does not have an account with the bank. However, he suggests that it is interesting that Standard Bank, which rejected his request to open an account, maintains a business relationship.

Unnamed arbitrage traders are also quoted in the report, who claim that their accounts were being terminated because of the arbitrage business model.

Sean Sanders, founder of Revix, a crypto-investing platform, appears to have confirmed the claims made by de Villiers, and the unnamed trader. Sanders, who claims Revix is not an arbitrage trading platform founder, is quoted as admitting that Revix has had better fortunes than the bank after going through grueling meetings. Sanders, however, laments South Africa’s inept regulation and the astronomically high level of banking risk.

Standard Bank complies with Regulations

Standard Bank spokesperson claims that the bank’s termination notices are not discriminatory and are meant to ensure compliance by all clients. A spokesperson of the bank stated:

Standard Bank is committed to treating its clients fairly and constantly strives to strike the appropriate balance between maintaining client relationships and ensuring regulatory compliance,

According to the spokesperson, the bank has developed risk management principles that all potential and current clients are continuously evaluated and assessed against. The bank also cites the South African Reserve Bank‘s position paper on cryptocurrency assets and the Intergovernmental Fintech Working Group as possible reasons for the bank’s decision.