Nordea Bank closed the account of Bitmynt AS toward the end of 2017. Bitmynt AS is a Norwegian-based cryptocurrency exchange with a fairly large user base. In December 2017, its founder, Sturle Sunde, sued Nordea Bank for the illegal closure of its account. Months went by as the case developed, and now the Oslo District Court has made a ruling on the lawsuit. Cryptocurrency exchanges in Norway won't be happy with the results.
What Happened Between Bitmynt AS and Nordea Bank?
When the account was closed, Nordea Bank based its decision on two main points. First, the bank claimed Bitmynt AS didn't implement enough anti-money laundering protocols. Then the bank stated the exchange ran a high risk of funding terrorism due to lax security measures. The Oslo District Court agreed with both of these points, siding with Nordea Bank in full. Unfortunately, such a ruling makes some valid points about Bitmynt AS.
What The District Court Ruled
According to the court, Sunde ran Bitmynt AS largely by himself. He took care of most of the security features implemented into the exchange. This means he more than likely verified the validity of individual accounts by himself. For that reason, it's likely his protocols didn't stack up to expectations set forth by Norwegian law. That's exactly how Nordea Bank viewed the situation, which led to the closure of the Bitmynt AS account.
In most countries, cryptocurrency exchanges are expected to follow anti-money laundering laws, just like banks and other financial institutions. Bitmynt AS would have to verify the identity of each member. Sunde would have to verify that funds going through his exchange aren't being used to launder money or finance criminals and terrorists. Based on testimony in court, none of these laws were followed in the proper manner.
The Oslo District Court also pointed out that Bitcoin in general invites the potential for misuse. In essence, its decision may push Bitcoin and cryptocurrency exchanges out of Norway, but it remains to be seen whether that happens. Sunde and Bitmynt AS made plenty of mistakes in its operations, though. Other exchanges in the country may be more stringent with security and the law.