Standard Chartered Stops Processing Bitcoin Wires

canstockphoto24351973Standard Chartered Bank has stopped processing wire transfers for bitcoin transactions, InsideBitcoins is reporting.

The news is all the more jarring considering that Standard Chartered is one of the more innovative banks in the world. Additionally, the development may portend a most comprehensive backlash against bitcoin from big-league financial institutions.

InsideBitcoins reports that Standard Chartered has cut off wires for bitcoin transactions and that has created processing headaches for Bitstamp, arguably Europe’s leading bitcoin trading platform. Here’s what Bitstamp, which has raised $10 million of venture funding to date, told InsideBitcoins:

We recently learned that an intermediary bank, Standard Chartered Bank, which is processing USD denominated transfers for one of our banks, appears to no longer be processing bitcoin-related wire transfers. As a result, those customers who have made a USD denominated wire transfer since Monday may have their deposits returned or experience a delay in posting to their accounts.

Truth be told, this could be more specific to Bitstamp, which lost $5 million of bitcoins in an apparent hack last month, although that doesn’t explain why Standard Chartered has stopped process bitcoin wires for all bitcoin transactions or trading platforms.

This sort of thing has happened before. According to Cryptoarticles, earlier this year, the Anycoin Direct exchange was suffering from a similar fate when Erste Bank und Sparkasse, an Austrian bank, decided to reverse customers’ transfer with or without any warning.

It is hard to digest Standard Chartered’s action, especially after reading Simon Taylor’s fine blog on “How to Fix a Bank in 100 Days.” Taylor, the vice president of entrepreneurial partnerships at Barclays, calls for banks to “embrace growth hacking,” which essentially means banks should operate nimbly like tech startups. Here, Standard Chartered has a window in a growth opportunity — namely bitcoin — and has chosen to … eliminate it. Whether Standard Chartered sees bitcoin as an unwanted threat to its global money transfer business is unclear. What is clear is that the inventor of Breeze and Straight2Bank has shot an arrow at bitcoin’s growth.

Standard Chartered [LON:STAN] has a market capitalization of $22.7 billion.

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2 thoughts on “Standard Chartered Stops Processing Bitcoin Wires

  1. […] the company lost more than $5 million bitcoins in a high-profile apparent hack. A month later, Standard Chartered Bank stopped processing wire transfers for bitcoin transactions. But Bitstamp’s co-founder Nejc Kodric said that the company is now as secure as it […]