Prasos Oy, a major crypto service provider has lost most of its banking partners in what could be a major blow to the wider crypto-market.
Prasos Oy claims to believe in the future of the technology, but they have suffered a huge setback having lost the backing of the majority of their banking partners. Prasos provide a variety of crypto-related services through their app ‘Coinmotion Instant’ and websites coinmotion.com that allows users to buy, sell, and store crypto and their Finnish crypto exchange, Bittiraha.fi, so these developments could have a devastating effect on the Finnish market.
Why are banks blocking Prasos?
Four different banks have now blocked transactions from Prasos amidst fears of breaking money laundering laws, a concern that is becoming one of the most common in the crypto market. In blocking transactions from Prasos, these banks are attempting to make sure they comply with KYC and AML regulations as well as ensuring people can’t rack up debt by investing in a currency that many still see as dangerously volatile.
Similar moves have been observed around the world, like in the USA and China where credit card companies do not allow their customers to participate in ICOs.
What does this mean for the market in general?
One thing is for sure, it won’t do the market much good. With only one bank left helping facilitate its exchange of crypto, Prasos is in a tenuous position. Uncertainty regarding crypto will now be rife in Finland, and though it may be difficult to convince native investors to ride out the storm, maintaining investor confidence has to Prasos’ top priority.
The worst-case scenario could see Prasos close down and the Finnish crypto market decimated as a result of investor fear. This would almost certainly cause unease beyond Finland at a time when the highest-profile alt coins are falling in value.
How is the problem being addressed?
Prasos have stated that they are willing to comply with any guidelines that legislators can provide so that they can keep trading. They issued the following statement: “We’ve created identification practices, which we have taken into use in March, and they comply fully with anti-money laundering laws and regulations, even though authorities do not even require this from us as our business is not under regulatory obligations.” If this is true, it’s a start, but the damage may already be beyond repair — for Prasos at least.
All of this highlights one of the main problems in the crypto world today: the need for legislation and the apparent bewilderment of the authorities when it comes to implementing a working system. Currently, the situation looks bleak for Prasos, but with numerous discussions taking place throughout the world, we should, hopefully, be about to enter a period when these issues are properly addressed.
Michael is an English and Creative writing graduate of Liverpool John Moore’s University, a former editor of several magazines, and a crypto-currency enthusiast. He is mostly interested in crypto-legislation and the potential of decentralized technology to change the world.