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Prasos Oy, the Finnish Digital Exchange, May Shut Down Soon

Finnish Exchange is Hanging by a Thread

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Prasos Oy has become one of the most popular Nordic digital currency exchanges in recent time. To convert digital currency into Euros, the exchange is reliant on the nation’s centralized banks, which have been quite cooperative until recently. Besides that, the exchange also runs Bittiraha.fi and Coinmotion.com.

Just One Lifeline Remaining

Thus far, the exchange is in a precarious situation; four of the five banks it was using have abandoned ship, and it has been left with just one partner bank. According to Bloomberg, this is because the exchange has been implicated in money laundering activity. However, the four banks have yet to make a public statement as to why they ended the partnership.  

Laura Niemi, the manager in charge of the corporate security department of OP Group, one of the banks that has cut ties, said that bank was worried about the anonymity that came with the digital currency. The CEO of Saastopankki, Tomi Narhinen, said:

In most cases, it’s practically impossible, or at least very hard, to do business with cryptocurrency dealers and exchanges because it can be impossible to determine the origin of the funds.

However, it is worth noting that Finland has no regulation on cryptocurrency. Despite this, some banks have decided to avoid digital exchanges over fears of money-laundering activity. The main issue they have with crypto is that it offers anonymity, which contradicts the EU’s anti-money laundering laws. These laws were recently provisionally extended to encompass cryptocoins. The rules state that the financial institutions must state the names of customers and the source of money.

How Prasos Is Trying to Remedy the Situation

Prasos recently stated that they have been trying to remedy the situation. They said that they have created identification practices, which have been in place since March. According to the exchange, these rules comply will all anti-money laundering rules and regulations in the EU. This is despite the fact that the authorities do not require the exchange to do this.

Recent Growth Spurt Has Caused Jitters

Last year’s spike in crypto prices also led to major fears for the banks. The CEO of Prasos stated that in 2017, transaction volumes rose to almost $185 million. He said that he realized that the growth spurt in crypto had caused worry amongst the banks. However, he added:

Along the way, we’ve been given very little information by the banks on what we could do to solve the problem.

Regulation Could Be Their Savior

The CEO hopes that regulation could help to keep their exchange open. Despite this, the head of the European Banking Agency, Andrea Enria, said he believed the future was bleak for exchanges. This was because the agency would probably continue advising banks in Europe to avoid crypto.

What do you think of banks in Finland cutting ties with Prasos? Leave us your thoughts in the comments section below.

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