At least four Australian banks are accused of freezing customer accounts on suspicion of being linked to cryptocurrency activities. The banks are also said to be blocking transfers to several crypto exchanges.
Certain Australian banks are freezing customer accounts and transfers to crypto exchanges because of suspected activity with Bitcoin, according to several crypto investors. In a tweet that went viral, crypto trader Alex Saunders said that National Australia Bank, ANZ, the Commonwealth Bank of Australia, and Westpac Banking Corporation were blocking client accounts and transfers to several crypto exchanges, including CoinJar, Coinbase, CoinSpot, and BTC Markets.
The tweet received dozens of comments, with many internauts calling the banks’ behavior “disgusting” and “appalling.” Some social media users said they would switch to other banks.
“Great way to lose customers guys… Banks should be focusing on how they can invest in crypto rather than blocking customers from spending their own hard earned,” Mick Sullivan replied.
Great way to lose customers guys… Banks should be focusing on how they can invest in crypto rather than blocking customers from spending their own hard earned.
— Mick Sullivan (@MickSullivan12) December 28, 2017
However, some commentators refuted the allegation:
“As a Commbank employee this is simply not true. At least on Commbanks end,” a user said.
As a Commbank employee this is simply not true.. At least on Commbanks end.
— Sal Kalandos (@arsenalophy) December 28, 2017
The terms and conditions set this summer by Commonwealth Bank for CommBiz accounts stipulate that the lender could reject international transactions for reasons including an account being “used to facilitate payments to Bitcoins or similar virtual currency payment services.”
A Commonwealth Bank representative stated that the bank was open to tech progress in digital currencies. However, he went on to add that “we do not currently use or recommend any existing virtual currencies as we do not believe they have yet met a minimum standard of regulation, reliability, and reputation compared to other currencies that we offer to our customers.”
An ANZ representative said the bank does not ban clients from purchasing cryptocurrencies. Its terms and conditions make no direct reference to cryptocurrencies either, but there is a vague statement that says the bank “may exercise its discretion to close an account due to unsatisfactory conduct or for any other reason it considers appropriate.”
A Westpac spokeswoman declined to comment on isolated cases but stated that the bank had every right to check its customers’ activity so as to comply with its AML responsibility. She was cited as saying:
“Where we cannot verify the origin of transfers we may act to ensure we comply with Australia’s anti-money laundering obligations.”
Crypto exchange CoinSpot issued a statement to say it was imposing a “temporary restriction on all forms of AUD deposits” until at least the first week of 2018 because of the problems with Australian banks.
“We assure you we are just as unhappy with the situation as you, but unfortunately Australian banks have been so far unwilling to work with the digital currency industry, which leads to frequent account closures and strict limits on accounts whilst they remain operational, in effect debanking our industry,” CoinSpot said.
The other three crypto exchanges – Coinbase, BTC Markets and CoinJar – were not available for comment.
In mid-October, Australia updated an AML/CFT bill to bring Bitcoin exchanges under the current legislation. The Legal and Constitutional Affairs Legislation committee revised the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2017 to regulate digital exchanges.