- Digital bank Mercury closes accounts for startups in Ukraine, Nigeria due to compliance concerns.
- Founders scramble for alternative banking solutions, raising concerns about discrimination.
- Incident highlights challenges for foreign startups in the U.S. financial system.
Compliance concerns lead to account closures
Digital bank Mercury is facing criticism after abruptly shutting down accounts for startups in Ukraine, Nigeria, and other countries.
The move comes amidst increased scrutiny from U.S. regulators over Mercury’s onboarding practices for foreign companies.
While Mercury claims the decision was based on compliance complexity, founders and industry experts are questioning the fairness and impact, particularly on Ukraine’s burgeoning startup scene.
Uncertain future for impacted founders
Many founders, including Ukrainian entrepreneur Alyona Mysko of Fuelfinance, are scrambling to find alternative banking solutions.
Brex, a competitor, is stepping in to offer support to affected Ukrainian startups. However, concerns remain about broader industry discrimination against founders from sanctioned or “grey list” countries.
This incident highlights the challenges faced by foreign startups in the U.S. financial system. African fintech companies offering U.S. banking services see this as a potential opportunity to attract the displaced customers.
As the dust settles, questions linger about Mercury’s long-term commitment to international customers and the overall reliability of fintech banking solutions.
