HSBC severs links with Bitcoin firm

HSBC has severed ties with the firm behind the world's first regulated Bitcoin investment fund.

Jersey-based hedge fund Global Advisors (GA) claims the bank was worried about "money laundering risk".

GA's Daniel Masters told the BBC that the development threatens well publicised plans to make Jersey a global centre for digital currencies. However, HSBC had yet to respond to requests for a comment. Masters said both his firm and the Bitcoin fund are tightly regulated.

The States of Jersey has created a company called Digital Jersey, in part to foster financial technology.

Island politicians have travelled to Bitcoin conferences to promote Jersey's enthusiasm for digital currencies.

Masters launched the Global Advisors Bitcoin Investment Fund (GABI) in August after it was certified by the Jersey Financial Services Commission. He said HSBC's move was a "step in the wrong direction for Jersey".

Unregulated Bitcoin funds exist elsewhere, but the official approval allowed major investors, such as pension and insurance companies, to speculate on Bitcoin for the first time.

Having his accounts closed by HSBC is only the latest difficulty faced by GABI, said Masters.

He said that when he was launching GABI he could not find any island bank willing to provide services, so took GABI's business elsewhere.