Largest Nordic bank goes bearish on Bitcoin

In a fresh blow for Bitcoin the largest Nordic foreign currency trader SEB has rejected requests from customers to set up accounts to manage Bitcoin. The bank is concerned that software associated with the digital currency may be used to engage in illegal activities.

Johan Andersson, chief risk officer at SEB, said in response to questions from Bloomberg:

Given the rules we have established for ourselves and rules that authorities have set up to prevent money laundering, we have currently made the decision that we cannot offer transactions, accounts or currency exchange in Bitcoin.

The comments came in the wake of the arrest of two men in the US who operated Bitcoin exchange businesses being charged with money laundering for assisting drug merchants exchange $1m (£603,000) in cash for Bitcoins.

On Monday, prosecutors in New York announced charges against Charlie Shrem and Robert Faiella for attempting to sell $1m of the digital currency to users of black market website Silk Road which was shut down by authorities in September.

The virtual currency has received a frosty welcome in Europe over the last several months, with the European Banking Authority (EBA) warning that "no specific regulatory protections exist in the European Union that would protect consumers from financial losses if a platform that exchanges or holds virtual currencies fails or goes out of business."

Nordic countries have proved particularly hostile to Bitcoin.

In December, both the Norwegian and Danish authorities announced further regulations on cryptocurrency. Norway is planning to treat the digital currency as an asset that will be subject to capital gains tax.

Denmark is preparing to amend existing financial legislation to cover Bitcoin under its regulatory umbrella. However, Denmark is unable to ban a company from creating a Bitcoin exchange.

Benny Engelbrecht, spokesman for the social democrats said In December:

There are clearly issues that need to be solved on the use of Bitcoins.

There’s clearly a need to regulate Bitcoins and other virtual currencies; it’s not something we can do on our own. It has to be done on the European level and globally.