Scott Dedels, a crypto author, took to X, notifying the community that a bank had blocked two separate Bitcoin purchases without any “concrete” reason given. Dedels now wants people to withdraw funds, saying financial institutions shouldn’t control how their clients decide how they spend their monies.
Bank Blocks Bitcoin Transaction, What’s Going On
Bitcoin remains the world’s largest and liquid cryptocurrency, looking at its market cap. Despite this, Bitcoin is not approved as legal tender in most jurisdictions, except El Salvador, where the government accepts BTC as a medium of exchange.
Still, BTC is designed to not only act as a medium of exchange (MoE), just like money, but also as a store of value, more like gold. The global, borderless nature of crypto means the coin can be used conveniently to pay for services rendered.
While convenient, Bitcoin and crypto assets remain volatile, with some global banks increasing surveillance to crack down on scams.
It couldn’t be immediately clarified which bank stopped Dedels’ Bitcoin purchase. However, in the same post, the author said it is a “Big 5 Canadian bank.”
Moreover, an insider confided that more banks in Canada are keen on stocking up their balance sheets. In this effort, banks are increasingly sensitive and want to keep more money to increase their lending ability. This “sensitivity” explains why more banks are barring fund transfers to crypto.
Canada Developing Laws, Countermeasures Taken
In a report, the Canadian Anti-Fraud Centre said its citizens lost over $161 million to investment scams, most involving crypto assets. In this scam, the fraudster promises higher returns before disappearing with funds. As such, some Canadian banks resorted to blocking crypto purchases to make it harder for unsuspecting users to become victims of scams.
Crypto regulation is evolving in Canada, and like in the United States and other active zones, it is being refined. Even so, there have been notable developments in recent months, especially in 2023, following the collapse of FTX, a defunct crypto exchange, sparking regulators in major economies to crack down on facilitators, mostly exchanges.
In February 2023, Canada’s securities regulators demanded crypto exchanges to register. A few months following this, Binance exited the country. Beyond mandatory registration, Canada is working on a comprehensive regulatory framework.
In July 2023, the federal government released a report with 16 recommendations, mostly revolving around oversight, due diligence, and consumer protection for regulating crypto assets in Canada.