Facts
What was going on? Rabobank has a group of companies on the books that focus on developing new technology for more efficient working and sustainable living, such as making paperless and digitizing (government) agencies. As of 2013, there is research into crypto currencies and mining them. Bitcoins are also being bought and sold. Later, one of the companies will focus on the development of blockchain: the technology behind bitcoin, among other things.
Among other things, Rabobank entered into two current account agreements in 2013 and 2016. In July 2019, it conducts an internal client investigation into the group. It follows that a group company owns bitcoins. Rabobank's internal policy on virtual currencies states that corporate clients cannot trade or hold virtual currencies. Referring to the bank's obligations under the Money Laundering and Terrorist Financing (Prevention) Act to have this strict policy for (trading in) corporate virtual currencies, Rabobank states that all bitcoins must be sold within three months. If not, it must terminate the banking relationship with the group.
The bitcoins are sold within three months, but in proceedings, the companies seek a declaratory judgment that the bank breached its duty of care by wrongfully threatening to terminate the banking relationship and that the bank must compensate them for damages in this regard. The court dismisses the companies' claim, the court of appeal grants the claims.
Verdict
- Bank policy on virtual currency and Wwft
The Wwft has no obligation for banks to exclude companies engaged in virtual currency as clients in advance. Art. 3 paragraph 2 sub d Wwft does imply that in certain cases the bank must investigate the source of the funds, but Rabobank has not sufficiently substantiated why this investigation would not be possible for this group of companies. The explanation of this provision of the law prescribes an individual test with respect to specific transactions, but does not require a categorical policy to exclude all corporate clients who buy and sell bitcoins. According to the court, Rabobank's requirement to sell all bitcoins within three months cannot be (directly) based on the Wwft, as indicated by Rabobank.
- Consideration of interests
Under Art. 35 of the applicable General Banking Conditions (GBC), Rabobank is in principle authorized to terminate a banking relationship. In doing so, it must carefully consider the interests of its clients on the basis of its contractual duty of care (Art. 2 GBC). In doing so, an individual and careful weighing of interests specific to the client in question must be made, taking into account all the interests of that client.
In this ruling, the group companies had its equity position in bitcoins audited annually by its auditor who included it in the financial statements. The group confirmed to Rabobank its willingness to stop "mining" the cryptocurrency. The purchases and sales showed that there was little transaction traffic in the bitcoin portfolio. There was no evidence of speculative investment activity and no specific unacceptable risk of money laundering, terrorist financing or violation of other laws or regulations. Requests for information from the bank were complied with at all times.
Against this background, the unilateral termination of the banking relationship based on the bank's policy was careless and in breach of the bank's duty of care, because no or insufficient account was taken of the interests of the group of companies, the court said.
Conclusion
Rabobank acted negligently and in breach of its duty of care in requiring a corporate client group to sell the bitcoin portfolio relying on its internal virtual data policy. The Wwft does not require this. The court ruled as a matter of law that the damages suffered as a result must be compensated. What those damages are will have to be determined in further proceedings (or in a settlement).
This ruling fits into the series of rulings on the question of whether there is a breach of the duty of care by a bank when terminating a banking relationship, or at least the threat thereof. Especially when it is only a matter of closing a bank account, a bank will have to indicate concretely why its interest in closing an account outweighs the client's interest in having a bank account, especially if there are no major obvious integrity risks. Merely referring to its own (amended) policy will not suffice in that situation.
Incidentally, the Supreme Court has since rejected Rabobank's appeal against the court's ruling.
