A close look at recent headlines reveals the current reality for the bitcoin industry – that despite the potential world-changing promise of its underlying technology, its businesses are still facing hurdles when attempting to bring their products and services to market.
However, not all startups are taking the indecision of banks lightly.
Lithuania-based bitcoin startup Bitmarket.lt is fighting back against its former bank, Swedish financial services giant Swedbank, after it shut down the company’s accounts. Launched in late 2013, the dispute created headlines in Lithuania, and as of September, it’s still being fought in court.
Speaking to CoinDesk, founder Audrius Ramanauskas said that Bitmarket.lt has since found a stable banking partnership, but that now, he’s carrying on the fight for the greater community good.
Ramanauskas told CoinDesk:
“I want to fight for the bitcoin industry, at least in Lithuania. I would like to create precedent. I mean if we win against Swedbank, it will be easier for other players in this market and around the world.”
Legal issues aside, the 42-year-old serial entrepreneur has used his connections and business savvy to promote bitcoin in a part of the world where digital currency awareness remains low, most recently by signing notable national airline Air Lituanica to its payment processing service.
Despite the trials he’s faced, Ramanauskas remains a bitcoin believer.
“Bitcoin is the future of e-commerce payments,” he said. “So, I made a decision to start a bitcoin exchange and to promote bitcoin in Eastern Europe.”
Bitmarket.lt targets Europe
Though Bitmarket.lt has global ambitions, the startup is currently focused on providing bitcoin exchange and processing services to the Estonian, Latvian and Lithuanian markets.
Each market is home to a dedicated Bitmarket website – Bitmarket.lt, Bitmarket.lv and Bitmarket24.ee, which are united under the umbrella brand Bitmarket UAB, though the company promotes itself as Bitmarket.lt. The company is not affiliated with Bitmarket.pl.
Ramanauskas, however, is looking beyond providing basic services to these markets.
Founded in 2002, his online travel agency, Interneto Partneris recently launched Abitsky.com, a bitcoin-only airline booking service. Interneto Partneris UAB operates Bookinghouse.ee, Eticket.fi, Flyhi.se, and other travel services companies in 12 countries, and provides web service and ticketing solutions to Air Lituanica
For Ramanauskas, bitcoin is an extension of his history in the travel industry, where he saw Interneto Partneris bear the burden of significant expenses from bank transactions, currency exchange, fraud and other side effects of legacy banking.
Ramanauskas recalls:
“Every month, my company was spending huge amounts of money on these costs. Keep in mind, that profit margins in travel are very small. Bitcoin can resolve these problems.”
Case against Swedbank
Lawyers representing Bitmarket.lt told CoinDesk that Swedbank opened the company’s account in mid-November of last year, first allowing Bitmarket.lt to use it for money transfers. But, after just weeks, the account was closed, a fact Ramanauskas realized when his business payments were declined.
Jonas Bložė, a partner at Vilnius-based Zeta Law, told CoinDesk that he is confident his client has a case to overturn the decision because neither the EU or Lithuania has outlawed bitcoin.
Bložė said:
“Even Lithuanian Bank (as supervising body) doesn’t have clear opinion regarding bitcoins, only guidance for consumers, who they say could be misguided because of bitcoin’s volatility.”
Swedbank claims that Bitmarket.lt never revealed its intention to buy and sell bitcoin. Speaking to 15min.lt in December about the decision, the bank said that the account was closed because it was deemed high risk.
In a separate yet notable move, the bank also closed the account of one customer for selling bitcoin in October, 2013.
Confidence to win
To date, however, Bitmarket.lt has not fared well in court, losing its first round when the court deemed that bitcoin posed a significant risk for Swedbank due to its possible use for terrorism and money laundering.
Ramanauskas said Bitmarket.lt isn’t optimistic that the case it will move forward soon, either, suggesting this could still take six to nine months. Bitmarket.lt has since filed an appeal of the original decision, and intends to return to court at the beginning of 2015.
Still, he is confident that Bitmarket.lt will triumph in its efforts, remarking:
“Banks are not a government institution and do not have any right to decide. […] Lithuanian law is quite strong describing what a bank can do or not do with clients’ bank accounts. I strongly believe we will win this case, because we are absolutely right.”
Quotes from Ramanauskas and Bložė have been edited for clarity.
Images via Bitmarket.lt; Shutterstock