In an effort to shield customers from investment scams, Australia’s Bendigo Bank has become the country’s fourth major bank to impose blocks on “high-risk crypto payments”.
The bank, on July 31, enforced new rules on instant payments to crypto exchanges which may introduce “some friction to certain genuine payments,” according to Jason Gordon, the bank’s Head of Fraud. The bank justified these blocks by citing the need to combat fraudulent payments and to enhance protections for its 2.3 million customers.
A spokesperson from Bendigo Bank informed Cointelegraph that certain instant crypto transactions identified as higher risk would be blocked. However, the bank has not disclosed further details at this time, including which exchanges might be affected by these changes. The bank identifies high-risk transactions using a “combination of factors”, but declined to provide specifics.
This move by Bendigo Bank echoes recent actions taken by three of Australia’s Big Four banks — Commonwealth Bank, National Australia Bank (NAB), and Westpac.
In an interview prior to Bendigo Bank’s announcement, Chengyi Ong, Chainalysis APAC Policy Head, warned that such measures could force the Australian public to interact with offshore crypto exchanges. Ong argued that while these blocks won’t prevent criminal actors from using other platforms, uncertainty over banking access could potentially drive crypto exchanges and users out of the jurisdiction of authorities.
Rather than severing ties with exchanges, Ong suggests that banks, regulators, telecom providers, and social media platforms need to collaborate at every point of the scam lifecycle.
Dr. Aaron Lane, senior lecturer with the RMIT Blockchain Innovation Hub, advocated for a cooperative approach between banks and exchanges, and emphasized that debanking should be reserved for severe and unacceptable risk cases and not be a general stance towards an entire industry or asset class.
Australia has been contemplating crypto-specific laws for over three years, and Dr. Lane urged lawmakers to prioritize crypto law reform. These comments follow a statement from the Department of the Treasury in June, expressing concerns that its inaction on debanking could hinder competition and innovation in financial services and could potentially “drive businesses underground and to operate exclusively in cash.”
Get $200 Free Bitcoins every hour! No Deposit No Credit Card required. Sign Up