Reacting to the news, Stuart Hoegner, general counsel at crypto exchange platform Bitfinex, told Cointelegraph that the decision was a “regressive step” in the context of the growing appeal of cryptocurrencies in the mainstream arena, adding: According to HSBC, the blacklisting was in line with the bank’s crypto restrictions enacted back in 2018. An excerpt from the bank’s policy as contained in the message to HSBC InvestDirect, or HIDC, customers reads: “HIDC will not participate in facilitating (buy and/or exchange) product relating to virtual currencies, or products related to or referencing to the performance of virtual currency.” “Instead of refusing to participate in products relating to virtual currencies, HSBC should instead focus on delivering optimal services to its customers, many of whom pay high fees and interest rate charges on the bank’s loans and credit card products. In fact, it is blockchain technology’s capacity — by virtue of removing intermediaries — that can enhance levels of inclusion, accessibility and transparency in financial products.”Making sense of it all
HSBC blacklisted MicroStrategy’s stock, preventing customers of the bank’s online retail trading platform in Canada from acquiring the company’s shares. While HSBC did not respond to Cointelegraph’s request for confirmation on the report, the bank has publicly verified the news using similar statements contained in the original message shared by customers on Twitter. HSBC blacklists MicroStrategy stock
In the message sent to HSBC InvestDirect customers who already hold MicroStrategy (MSTR) stock, the bank revealed that additional MSTR purchases will no longer be possible on the platform. The communique stated that such customers could hold their current MicroStrategy stock balances or sell their shares. With corporate Bitcoin adoption becoming commonplace, the conversation appears to be shifting toward life and annuity companies and sovereign wealth funds to see where the next wave of institutional BTC investment will emerge. However, for legacy players like HSBC, Bitcoin and cryptocurrencies, in general, remain anathema even if the actions taken thus far appear to be arguably arbitrary.
Commenting on the lack of clarity in HSBC’s decision, Jeffrey Wang, head of Americas at crypto finance provider Amber Group, told Cointelegraph: “It’s a very slippery slope for HSBC. Will they publish a clear set of defined rules for what they deem to be companies that derive value from virtual currencies?” He questioned further: “Why haven’t they also put this trading restriction on other companies that have publicly disclosed holdings of Bitcoin like Tesla? Will they block trading in Coinbase?” As an HDIC customer, Wang also expressed displeasure at the uneven application of HSBC’s anti-crypto policies, adding: Unlike MicroStrategy, which only holds Bitcoin on its balance sheet while still carrying out its function as a business intelligence firm, some of the tradable stocks on the HDIC platform belong to companies, like Hut 8, that derive value directly from cryptocurrencies.
Elon Musk’s electric vehicle manufacturing giant, Tesla, acquired about $1.5 billion worth of Bitcoin back in February. Hut 8 is a Bitcoin mining establishment, while Square operates Cash App, an avenue for buying BTC that also contributes greatly to Square’s revenue bottom line. In singling out MicroStrategy, HSBC referred to the company as a “virtual currency product,” hence its decision to prevent customers from buying MSTR. However, HDIC lists shares of several companies with significant cryptocurrency involvement including Tesla, Square and Hut 8 Mining, to mention a few.
The News Highlights
- Bitcoin on balance sheet attracts negative attention from anti-cryptographic banks
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