AN angry UK business owner who had his bank accounts frozen for trading in cryptocurrency says he’s still waiting for answers SIX MONTHS later.
At the beginning of August last year Scott Snaith, one of the UK’s leading retailers of electric bicycles, was stunned to learn he’d been locked out of his personal and business accounts with Barclays.
It came just hours after Scott, who runs popular 50cycles, had been trading Bitcoin for cash through a popular peer-to-peer trading platform – transactions he said were ‘entirely transparent and above board’.
Scott, headquartered in Loughborough, complained fiercely to both the bank and the financial ombudsman, who both launched investigations, as well as to his local MP Nicky Morgan who is also the Chair of HMRC Treasury department and responsible for future UK cryptocurrency regulations.
But some 25 weeks later, Scott says his accounts are STILL frozen, and his money seized, as he grows increasingly impatient for answers.
Scott – who has a vested interest in crypto, having launched an e-bike that will generate cryptocurrency for its customers as they ride – says: “I was extra cautious with those I traded with, ensuring they were UK account holders with verified IDs and all receipts of transactions went through escrow.
“Yet my account was unceremoniously seized with me having absolutely zero access to it, even now.
“I lodged a complaint with the bank’s senior fraud advisor and I’ve taken the issue to the Financial Ombudsman.
“But we’re now six months down the line and I’m still in the dark.
“My treatment has been nothing short of a disgrace. I’ve been made to feel like a criminal simply because of my interest in future tech.”
The transaction, on the popular website LocalBitcoins.com, took place through Scott’s personal account – but his linked business account was also then blocked.
On January 15 the Financial Ombudsman Service wrote to Scott to say they were still investigating his case and that they were dealing with a ‘number of complaints like yours’.
Meanwhile Barclays issued a response saying it was ‘complying with its legal and regulatory obligations and we never take the decision to issue a notice of closure, or end a client relationship, lightly.’
But Scott says: “Both my business and personal Barclays accounts were over 10 years old and have seen years of business turnover running through them, thus benefiting the banks.
“I’m a professional business owner, yet the banks are failing to keep up with their customers’ habits. They’re creating obstacles and we are the ones being punished.
“My case should be a stark warning to anyone who holds a bank account with any funds in it.
“Like a mafia protection racket, the banks can close it down and keep your money without question.”
A growing number of UK banks are seeking to ban their customers from trading in crypto.
In February last year the Lloyds Banking Group – which includes Halifax, MBNA and Bank of Scotland – also announced a crypto crack-down, banning customers from buying bitcoins using credit cards.
A spokeswoman said: “Across Lloyds Bank, Bank of Scotland, Halifax and MBNA, we do not accept credit card transactions involving the purchase of cryptocurrencies.”
Social media giant Facebook and Mailchimp have also banned adverts for bitcoin and other cryptocurrencies on its sites and their platforms.
But Scott points to the fact that in January this year the HMRC Treasury as published new guidelines for those trading in crypto – saying any such trades are taxable.
Scott adds: “On the one hand you’ve got banks clamping down on cryptocurrency from instruction of the government over ‘Know Your Customer, laws whilst on the other hand we have the UK Treasury department taxing both gains and losses made from it.
“It is ludicrous and unfair. Surely a tax should be used to promote innovation in the UK and not used to suppress it?
“In Germany and France trading in crypto is currently tax free.”
Scott says he was trading crypto as part of research and development for his ‘TOBA’ bike, which will be able to generate crypto tokens for every mile pedalled and which has generated headlines worldwide when the concept was announced last year.
He also aims to go completely ‘bankless’ by 2020.
For more information about TOBA – go to https://www.tobaelectricbike.com
