Jason Gordon, head of fraud at Bendigo Bank, explained that the bank has categorized cryptocurrency payments as high-risk transactions. The bank is therefore forced to block money transfers to certain cryptocurrency platforms in order to strengthen the protection of its 2.3 million customers. However, Gordon did not say which exchanges the blocking would apply to, or what factors the bank uses to determine the risk level of transactions.
Bendigo Bank took these measures after three major Australian banks – Commonwealth Bank, National Australia Bank (NAB) and Westpac – also banned customers from opening deposits on cryptocurrency exchanges.
Earlier, Chengyi Ong, a senior manager at the Asia-Pacific division of analytics firm Chainalysis, said such actions by banks will not stop criminals from using cryptocurrency platforms. Whereas the uncertainty regarding the banking of crypto market participants will force local traders and investors to use offshore venues. Ong suggested that instead of blocking crypto exchanges, banks should start working with regulators, telecom service providers and social networks to detect cryptocurrency fraud. Ong said regulators should target all potential points of interaction between fraudsters and their victims, as blocking deposits to crypto exchanges will not solve the problem.
Dr. Aaron Lane, a senior lecturer at Melbourne’s Royal Melbourne University of Technology (RMIT), added that the best thing banks can do to protect consumers is to cooperate with crypto exchanges. A client should only be refused banking services in cases of serious and unacceptable risk, not because of the banks’ bias towards the industry. Australia has been engaged in rulemaking for cryptocurrencies for several years, and Lane urged local lawmakers to be more loyal to cryptocurrencies.
Faryar Shirzad, head of policy at cryptocurrency exchange Coinbase, recently asked the Australian government to speed up legislation to regulate digital assets, citing the example of the European Union, which has already passed the Cryptocurrency Regulation Bill (MiCA).