As you may have noticed, Lakestone Bank & Trust has disabled reviews on our Facebook page due to an overwhelming number of negative and some very offensive activity from the cryptocurrency community. We want our Facebook page to be a place where we share positive news and information to help customers and the community. Comments are welcomed and encouraged.
The decision Lakestone Bank & Trust made to restrict customers from purchasing cryptocurrency such as Bitcoin has resulted in some very offensive posts. These posts are mostly from individuals that do not bank or live in our market area. We respect freedom of speech. We also fully support the First Amendment to the United States Constitution and value others’ opinions when shared in a constructive manner; however, threats and harassment will not be tolerated.
Our decision to limit purchases of cryptocurrency is not an intent to control where our customers spend their money. As a federally-insured financial institution, we have a legal and regulatory duty to protect our customers and their hard-earned money. Given that emerging, non-traditional cryptocurrencies are not federally-insured and can exhibit a great deal of volatility, they present a tremendous amount of financial risk. At this time, FinCEN (The Financial Crimes Enforcement Network) has indicated that individuals trading in cryptocurrencies must be considered Money Service Businesses (MSB’s). This designation carries heavy regulatory requirements for both the Bank and the individual. For the individual, this includes registering as a MSB with the proper federal agencies. Many individuals trading in cryptocurrency are not aware of this requirement or choose to ignore it. Therefore, at this time we are not comfortable with the risks associated with these types of transactions and have made the decision to not allow funds to be used in these transactions.
We understand this decision may not be to the liking of some customers who are comfortable with the cryptocurrency marketplace and desire to transact in these forms of digital payments. The number of requests we have had from customers related to cryptocurrencies have been minimal. Yet with the apparent growing popularity of Bitcoin (and others), we have sought advice from our regulatory agencies, discussed the policies that other community banks have adopted and are making an effort to understand these transactions, and the risks they pose to our customers and the Bank.
At this time, cryptocurrency transactions will not be processed at Lakestone Bank & Trust. As this new currency becomes more prevalent and regulatory bodies issue more guidance, this policy may change.
Customers with specific questions regarding their account can contact Customer Service at 810.664.2977.