Blockchain Australia says banking restrictions will have ‘costly side effects’ Blockchain Australia says banking restrictions will have ‘costly side effects’

Blockchain Australia says banking restrictions will have ‘costly side effects’

Unveiling Blockchain Australia's strategies to tackle scams and address banking restrictions impacting the cryptocurrency sector.

Blockchain Australia says banking restrictions will have ‘costly side effects’

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.

Industry group Blockchain Australia believes that placing “blanket restrictions” on the crypto industry in the Oceanic country could potentially result in “costly side effects.”

The trade body made the statement in response to the Commonwealth Bank of Australia’s recent decision to restrict payments to crypto exchanges and place a monthly limit on all crypto-related transactions.

According to CBA, the decision was spurred by the high amount of scams and frauds taking place in the crypto industry. The lender said at the time:

“Customers who make payments to cryptocurrency exchanges are currently facing a significantly higher risk of potentially being scammed.”

‘Profound curtailment of economic freedom’

Blockchain Australia said it acknowledges the risk of scams and frauds present in the industry but does not condone restricting banking services — which are the lifeblood of any business — for crypto exchanges.

Michael Bacina, Chair of Blockchain Australia said:

“Banking is an essential service to nearly every Australian business in our increasingly digitised economy, and there is an outsized impact on all customers of a business when payment restrictions or debanking takes place. In many cases it can be fatal for the business.”

The trade body further argued that ensuring there are sufficient measures in place to protect consumers should fall under the purview of regulators and not the banking industry.

It added that all digital asset exchanges operating in the country are registered with the Australian Transaction Reports and Analysis Centre — which handles anti-money laundering supervision — and have extensive measures in place to monitor and detect illicit transactions.

According to Blockchain Australia, restricting consumers from engaging with crypto exchanges could put them at risk of falling prey to other “harder to detect” scams.

Jackson Zeng, CEO of Caleb and Brown, added, “The recent decision by banking institutions to restrict millions of their customers from making payments to cryptocurrency exchanges represents a profound curtailment of economic freedom in Australia.”

‘Crypto isn’t bad, scammers are bad’

Blockchain Australia said it intends to launch three initiatives to help combat the rising number of scams in the crypto industry.

The first initiative is an education program that will aim to educate crypto users about the various scams present in the industry and how to identify suspicious activity. The program will also show consumers that fraud is not an inherent part of the industry— “crypto is not bad, scammers are bad.”

The second initiative is to recognize the “good actors” in the industry — such as properly registered exchanges that comply with regulators — by consumers and the banking industry. This will help establish best practices and trust in companies that are genuinely looking out for consumers and trying to combat fraudulent activity.

The final initiative is conducting a roundtable discussion with politicians, regulators, banks and other relevant stakeholders to determine the best course of action to protect consumers without harming the innovation and growth of the crypto industry.

Posted In: Banking, Regulation, Scams