OKPAY Makes U-Turn on GBP to Bitcoin Transfers

Pete Rizzo
Jan 21, 2014 at 17:30 UTC
Updated Jan 21, 2014 at 18:24 UTC

Web payments service OKPAY has announced that it will allow users to move pound sterling (GBP) into OKPAY web-based wallet accounts and then transfer these funds to cryptocurrency exchanges.

Rumours of the policy change by the merchant and consumer payment provider first surfaced on reddit and Bitcoin Talk after customers received emails. The announcement was later confirmed on 21st January via OKPAY’s official Twitter account:

The company’s email announcement suggests it made the move after changing its banking provider.

“New bank does not have any restrictions regarding the further usage of funds on crypto-currency markets. Please feel free to fund your account using the updated banking details and use the money without any limitations,” the email read.

Based in the British Virgin Islands, OKPAY bowed to pressure and cut its services to electronic currency exchanges back in May 2013. At the time, OKPAY cited the “risks” and “potential dangers” posed by anti-money laundering laws as the primary driver of the decision.

While limited to GBP, the move is indicative of OKPAY’s shifting stance on bitcoin. The payment services provider has historically been adamant about its support for emerging virtual currencies: in November the company added support for litecoin payments. OKPAY’s Konstantin Romanovsky said:

“The UK bank that we used before did not make a final decision on whether to handle transactions in favour of crypto-currencies or not. Therefore the compliance department of the bank asked us to restrict such transfers.”

“As of now we decided not to wait for the final decision and switched to alternative bank which does not have limitations of that matter,” he added.

A tumultuous history

As one of the most prominent early bitcoin affiliates, OKPAY’s announcement is noteworthy. After OKPAY abruptly curtailed wire transfer services to and from all bitcoin exchanges, Mt. Gox stopped accepting deposits via OKPAY before eventually cutting off withdrawals to OKPAY accounts.

Still, despite the decision, OKPAY was firm in its support for virtual currencies. The company wrote in April 2013:

“In many respects it breaks our heart to have taken this step (we’re a firm that champions financial innovation after all), but we know our banking providers are not comfortable with bitcoin and want payments to these firms restricted.”

“This is happening everywhere – notably Bitfloor and Bitcoin-24 shut themselves down recently. The banks – just like everyone else in the sector – are nervous because they don’t know what to think of Bitcoin. The regulators and politicians’ silence on the topic leaves us all in the dark,” the statement added.

OKPAY’s policy shift comes just months after it stipulated that GBP users check a box, verifying that their funds would not be spent on cryptocurrency, a feature that further incited users.

User frustrations

Due to its long history of policy changes, frustrations have become an accepted, albeit maligned, part of OKPAY’s service. Some reddit users have gone as far as to boycott the company, while others place the blame on the major banks OKPAY use, alongside its financial services provider Mayzus Financial. Reddit user mkellerman wrote:

“OKPAY are quite paranoid about AML and another problem is that their support people seem to be very bad at English, so their replies are often hard to understand. Their support are also slow [sic]. However in my experience they are an honest company.”

OKPAY emerged as a popular way for bitcoin buyers to move fiat currency into the Bulgarian-based bitcoin exchange BTC-e, and it remains unclear whether this policy shift will restore both cryptocurrency deposits and withdrawals.

Past statements from Mayzus indicate its partner banks include Deutsche Bank, Arab Jordan Investment Bank, Česká spořitelna and Barclays Bank. However, the company’s most recent email indicates its UK provider has changed.

Pounds Image via Shutterstock

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