Mercury recently faced federal scrutiny for allowing foreign companies to open accounts through one if its partners, Choice Bank.
The Federal Deposit Insurance Corporation (FDIC) showed concerns over the fact that Choice Bank had opened Mercury accounts in legally risking countries.
To address that, a spokesperson from Mercury stated that the company has updated its eligibility requirements and notified certain customers that it could no longer support them due to their addresses or the locations where they were recording frequent account activities. Some of these locations include, among others, Ukraine, Nigeria, North Korea, Iran, Libya, and Russia. However, the change in policy for Ukrainian people only appears to be applied to founders living in East European country, and not founders living in the US with a Ukrainian passport.
The decision to include Ukraine on the ban list is surprising but Mercury claimed that navigating current US sanctions programmes has become too complex but promised to revisit the policy for Ukraine in the future.
Not only Ukrainian users were affected but also founders from Nigeria and, surprisingly, Croatia. Two Nigerians claimed their will be forced to close their accounts with Mercury soon, despite their startups being domiciled in the US.
Unfortunately, founders in Nigeria faced a bumpy ride with Mercury before. In 2022, the digital banking startup restricted almost 30 countries linked to tech startups in Nigeria and other African countries, most of which had already gone through US-based accelerators, including Techstars and Y Combinator.
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