Why crypto businesses struggle with banking, which EMIs and offshore banks accept exchanges and Web3 companies, and what documents you need to get approved.
Crypto businesses — exchanges, custodians, OTC desks, payment processors, and Web3 companies — face the most challenging banking environment of any technology sector. Despite being legal in most jurisdictions and increasingly regulated, crypto businesses are routinely de-banked, rejected without explanation, and forced to manage operations across a patchwork of relationships that can dissolve without warning.
This guide covers the full banking picture for crypto businesses: why banks are reluctant, what has changed in the regulatory landscape, which institutions will actually work with you, and how to build a banking structure that survives long-term.
Bank reluctance toward crypto businesses is structural and well-documented:
AML and sanctions exposure: Crypto transactions — without proper controls — can be used to evade sanctions, launder proceeds, and move value across borders without traditional financial system oversight. Banks that service crypto businesses become potential conduits for this activity and face significant regulatory and legal exposure.
Regulatory uncertainty: In many jurisdictions, crypto regulation is still evolving. Banks are uncomfortable with clients operating in a space where the rules may change significantly — and where being caught on the wrong side of a regulatory determination could be very costly.
De-banking incidents: The crypto sector has experienced a wave of de-banking events — most visibly in the US following the 2023 banking crisis (Silvergate, Signature Bank, Silicon Valley Bank), where crypto-friendly banks collapsed or were seized. This increased regulatory pressure on remaining banks to reduce crypto exposure.
Reputational risk: High-profile crypto collapses (FTX, Celsius, Three Arrows Capital) and fraud cases create reputational risk for banks perceived to have enabled them.
Technical complexity of AML: Blockchain transaction monitoring is technically complex. Banks' standard AML tools are not designed for on-chain analysis. Without specialist expertise, banks cannot adequately assess the risk of crypto clients.
Despite the challenges, the regulatory framework for crypto has progressed significantly:
MiCA (EU Markets in Crypto-Assets Regulation): The EU's comprehensive crypto framework, fully applicable from 2024. MiCA establishes licensing requirements for crypto asset service providers (CASPs) across all EU member states — creating a passportable licence similar to MiFID II. MiCA-licensed entities have substantially better banking access within the EU.
UK FCA Registration: UK crypto businesses must register with the FCA under Money Laundering Regulations. FCA-registered crypto firms have better access to UK banking than unregistered firms.
US FinCEN Registration: US Money Services Business (MSB) registration and state money transmitter licences are required for most US crypto businesses. Banking access in the US remains challenging, but registered/licensed firms have more options.
VASP Regimes: Many jurisdictions now operate Virtual Asset Service Provider (VASP) registration or licensing regimes — Dubai (VARA), Singapore (MAS), Hong Kong (HKMA/SFC), and others. Regulated VASPs have better banking access in their respective jurisdictions.
The key trend: Regulatory clarity improves banking access. The more regulated and demonstrably compliant your business, the better your banking options.
Exchanges (centralised/CEX): High-volume fiat on/off ramp requirements. Multiple fiat currencies. Fast deposit and withdrawal processing. Client money segregation may be required under local regulation.
OTC Desks: Large individual transactions. Relationship-based banking. Strong source of funds documentation for each trade counterparty.
Custodians: Holding client assets. Regulatory requirements for safeguarding (analogous to CASS in the UK). Low transaction frequency but large balance requirements.
Crypto Payment Processors: Accepting crypto on behalf of merchants and settling in fiat. High transaction volume. Merchant account structures.
DeFi / Web3 Protocols: Often the most challenging — decentralised operations without a clear legal entity structure make banking very difficult.
Mining Companies: Relatively standard banking needs for operational expenses, equipment purchases, and converting mined crypto to fiat.
NFT Platforms and Web3 Marketplaces: Variable needs depending on whether primarily fiat or crypto-denominated.
Specialist Crypto-Friendly Banks: A small number of banks globally have specifically built programmes for regulated crypto businesses:
EMIs with Crypto Programmes: Several EU and UK-regulated EMIs specifically serve registered/licensed crypto businesses. They offer multi-currency IBANs, SEPA/SWIFT, and experience with crypto-fiat conversion flows.
MiCA-Compliant Banking (EU): As MiCA implementation matures, EU banks are developing more structured approaches to onboarding MiCA-licensed CASPs. Institutions in Germany, France, and the Netherlands are beginning to build dedicated crypto business programmes.
US Options: Following the Silvergate/Signature collapse, US crypto banking options are limited. Mercury Bank, Western Alliance Bank, and some community banks remain; crypto-focused neo-banks have emerged to fill part of the gap.
International Expansion: Crypto businesses often bank in jurisdictions with the clearest regulatory frameworks — Switzerland, Singapore, Dubai, Estonia — even if their primary customers are elsewhere.
Regulatory status: Your registration, licence, and the issuing authority. Banks verify this directly. Unregistered businesses are generally not bankable at reputable institutions.
Business model: Exactly what your business does. Exchange? Custodian? Payment processor? Each has a different risk profile and different compliance requirements.
AML programme: This is where most crypto applications fail or succeed. Banks need to see:
VASP due diligence: Under FATF guidance, VASPs must apply due diligence to counterparty VASPs. Banks will assess whether you have processes for evaluating the crypto entities you interact with.
Source of funds: Where did your initial capital come from? How do you verify the source of funds for large crypto-fiat conversions?
Wallet addresses and chain analysis: Banks increasingly ask to see your blockchain analytics reporting — demonstrating that you monitor wallet exposure and exclude sanctioned addresses.
Business geographies: Where are your customers? Where are your counterparty VASPs? Certain geographies significantly elevate risk.
Crypto businesses face more complex AML requirements than most other high-risk sectors:
On-chain transaction monitoring: Standard bank AML tools are insufficient. Crypto businesses need dedicated blockchain analytics platforms that can screen wallet addresses against sanctions lists, assess exposure to illicit activity, and generate the risk scores that banks expect to see.
KYC for all users: Regulated crypto businesses must apply KYC to all customers — not just those above a threshold. The standard varies by jurisdiction but is typically equivalent to standard financial services KYC.
Sanctions screening: Screening customers and wallet addresses against OFAC, EU, UN, and other sanctions lists. This must be ongoing — lists change, and wallets that were clean can become sanctioned.
Enhanced due diligence for high-value transactions: Large fiat-crypto or crypto-fiat conversions require additional scrutiny — source of funds documentation and trade rationale.
MLRO and governance: A qualified MLRO with crypto-specific compliance experience. Board-level AML oversight. Regular AML audits.
The Travel Rule is one of the most operationally significant AML requirements for crypto businesses:
What it requires: For transfers above a threshold (in most jurisdictions, USD/EUR 1,000), the originating VASP must pass identifying information about the sender to the beneficiary VASP. This mirrors the travel rule that has long applied to traditional wire transfers.
Why it matters for banking: Banks increasingly ask crypto business applicants whether they have Travel Rule compliance infrastructure. Without it, they cannot demonstrate compliance with a fundamental AML requirement.
Technical implementation: Travel Rule compliance requires a dedicated compliance messaging solution — either a proprietary integration or a third-party Travel Rule protocol provider (VerifyVASP, Notabene, Sygna Bridge, and others).
Banks' perspective: Banks that serve crypto businesses need their clients to have Travel Rule compliance in place — without it, the bank's own compliance position is weakened by the relationship.
Crypto exchanges and platforms need fiat payment rails for on/off ramp:
Card processing for fiat on-ramp: Accepting Visa/Mastercard for crypto purchases requires specialist processors that support crypto MCC codes. Rates are high — typically 3–6% — and rolling reserves are standard.
Bank transfer for larger on-ramp: SEPA and SWIFT bank transfers are essential for larger deposits and institutional flows.
Open banking: UK/EU crypto platforms increasingly use open banking solutions for instant fiat deposits with lower fees and no chargeback risk.
Fiat off-ramp: Paying customers in fiat when they sell crypto requires fast outbound payment capability. Your banking partner must support rapid fiat disbursements.
Stablecoin settlements: Many crypto businesses now settle in stablecoins (USDT, USDC) as an alternative to fiat. Banking partners increasingly need to accommodate stablecoin-adjacent flows.
Legal entity in a regulated jurisdiction: Companies incorporated and operating in jurisdictions with clear crypto regulation (UK, EU member states, Switzerland, Singapore) have substantially better banking access than offshore entities.
Obtain the appropriate licence/registration: FCA registration, MiCA licence, MAS licence — whichever is applicable to your market. Compliance demonstrates intent and creates accountability.
Build compliance infrastructure first: AML programme, blockchain analytics, Travel Rule solution, MLRO — have these in place before approaching banks. Applying without them signals you are not ready.
Diversify banking relationships from day one: Never rely on a single banking relationship. Crypto de-banking happens without warning and without appeal.
Engage specialist advisors: Crypto-experienced banking advisors know which institutions are currently onboarding, what their specific requirements are, and how to present an application correctly. This materially improves approval rates.
Looking to open banking for a crypto business? Contact our team — we work with specialist institutions across the EU and UK that have built programmes specifically for regulated crypto businesses.
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