HSBC confirms banning customers from buying MicroStrategy shares due to bitcoin concerns

Investment banking giant HSBC has confirmed banning customers of HSBC InvestDirect from buying MicroStrategy shares due to bitcoin concerns.

"HSBC has no appetite for direct exposure to virtual currencies [VCs] and limited appetite to facilitate products or securities that derive their value from VCs," an HSBC spokesperson told The Block.

Last week, a message from HSBC, dated March 29, surfaced on social media. That message directed HSBC InvestDirect users who already own MicroStrategy shares not to buy or transfer in additional stock. The bank, however, allows holding, sale, and outgoing transfers of MicroStrategy shares.

MicroStrategy is a pro-bitcoin company. The company owns 90,531 bitcoin, currently worth around $5.5 billion. On Monday, MicroStrategy also pivoted to bitcoin payouts for non-employee directors.

HSBC remains crypto-cautious at a time when a growing number of banks are dipping their toes into the crypto space. Goldman Sachs said last month it would offer bitcoin and other crypto investment vehicles to private wealth management clients in the second quarter of this year. Morgan Stanley has also started offering clients investments in the crypto space.

It is not clear whether HSBC's restrictions only apply to MicroStrategy stock or also shares of companies like Tesla and Square as both these companies hold bitcoin on their balance sheets. It is also not clear whether bitcoin mining stocks like Riot Blockchain, HIVE Blockchain, and Hut 8 Mining are part of the restrictions.

The HSBC spokesperson told The Block that the restrictions aren't new and have been in place since 2018.

It is unclear whether HSBC restricts all its customers worldwide from buying MicroStrategy stock or customers of select countries only. The spokesperson told The Block that the message was sent to customers in Canada.

HSBC InvestDirect is a division of HSBC Securities (Canada) Inc., a wholly-owned subsidiary of HSBC Bank Canada. HSBC Securities, on the other hand, operates globally.