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HSBC severs links with firm behind Bitcoin fund | HSBC severs links with firm behind Bitcoin fund |
(about 2 hours later) | |
HSBC has severed ties with the firm behind the world's first regulated Bitcoin investment fund. | HSBC has severed ties with the firm behind the world's first regulated Bitcoin investment fund. |
Jersey-based hedge fund Global Advisors (GA) claims the bank was worried about "money laundering risk". | Jersey-based hedge fund Global Advisors (GA) claims the bank was worried about "money laundering risk". |
GA's Daniel Masters told the BBC that the development threatens well publicised plans to make Jersey a global centre for digital currencies. | GA's Daniel Masters told the BBC that the development threatens well publicised plans to make Jersey a global centre for digital currencies. |
HSBC would not discuss individual customers, but said ending a client relationship is never done "lightly". | |
Mr Masters said both his firm and the Bitcoin fund are tightly regulated. | Mr Masters said both his firm and the Bitcoin fund are tightly regulated. |
The States of Jersey has created a company called Digital Jersey, in part to foster financial technology. | The States of Jersey has created a company called Digital Jersey, in part to foster financial technology. |
Island politicians have travelled to Bitcoin conferences to promote Jersey's enthusiasm for digital currencies. | Island politicians have travelled to Bitcoin conferences to promote Jersey's enthusiasm for digital currencies. |
Mr Masters launched the Global Advisors Bitcoin Investment Fund (GABI) in August after it was certified by the Jersey Financial Services Commission. | Mr Masters launched the Global Advisors Bitcoin Investment Fund (GABI) in August after it was certified by the Jersey Financial Services Commission. |
He said HSBC's move was a "step in the wrong direction for Jersey". | He said HSBC's move was a "step in the wrong direction for Jersey". |
Unregulated Bitcoin funds exist elsewhere, but the official approval allowed major investors, such as pension and insurance companies, to speculate on Bitcoin for the first time. | Unregulated Bitcoin funds exist elsewhere, but the official approval allowed major investors, such as pension and insurance companies, to speculate on Bitcoin for the first time. |
Having his accounts closed by HSBC is only the latest difficulty faced by GABI, said Mr Masters. | Having his accounts closed by HSBC is only the latest difficulty faced by GABI, said Mr Masters. |
'Money laundering' | 'Money laundering' |
He said that when he was launching GABI he could not find any island bank willing to provide services, so took GABI's business elsewhere. | He said that when he was launching GABI he could not find any island bank willing to provide services, so took GABI's business elsewhere. |
Global Advisors has found another Jersey bank, but GABI's banking is not done on the island, although the fund remains registered and regulated in Jersey. | Global Advisors has found another Jersey bank, but GABI's banking is not done on the island, although the fund remains registered and regulated in Jersey. |
Geoff Cook, chief executive of Jersey Finance, said he could not comment on individual cases, but said GABI reflected Jersey's position "as both a leading hedge fund jurisdiction and a pioneering centre for the rapidly evolving world of fintech (financial technology". | Geoff Cook, chief executive of Jersey Finance, said he could not comment on individual cases, but said GABI reflected Jersey's position "as both a leading hedge fund jurisdiction and a pioneering centre for the rapidly evolving world of fintech (financial technology". |
There have been issues around the digital currencies, including a lack of regulation and concerns about the potential for money laundering and other illegal activity. | There have been issues around the digital currencies, including a lack of regulation and concerns about the potential for money laundering and other illegal activity. |
In October 2013 the FBI shut down online marketplace Silk Road, which traded in drugs and other illegal goods and took payments using "crypto-currencies". | In October 2013 the FBI shut down online marketplace Silk Road, which traded in drugs and other illegal goods and took payments using "crypto-currencies". |
A spokesman for HSBC said: "We do not discuss individual customers, nor do we confirm whether an individual or business is, or has been a customer." | |
But he added: "In reviewing our portfolio, we have identified a number of relationships that don't meet our strategic criteria. | |
"We don't take the commercial decision to end a customer relationship lightly, and when we do so it follows careful consideration of that relationship in light of our strategic focus or global risk management standards." |
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