Senator Andrew Bragg stated that Australian banks disguise anti-competitive behavior to comply with regulatory requirements when they de-bank crypto customers.
“I believe that many banks have been pretending de-banking is a regulatory necessity. It is actually anti-competitive behaviour and far more sinister than it seems on the surface,” said the Liberal Senator for New South Wales in a prepared speech to the Tech Council of Australia.
When a financial institution decides not to offer banking services to customers, it is called debanking. Banks can immediately freeze or close an account without giving notice. Customers who are crypto-savvy may be concerned about anti money laundering (AML), and counter terrorist financing (CTF).
Cointelegraph was told by Senator Bragg that he heard evidence from his Senate Committee that banks had closed accounts for “commercial purposes” — a practice that has been “long known and flagged up by the ACCC [Australian Competition & Consumer Commission]”.
They bankrupted customers in order to preserve their market dominance. This is unacceptable.
In September, Michaela Juric, founder of Bitcoin Babe, testified before the Senate inquiry into “Australian Technology and Financial Center”. She stated that she was banned by 91 financial institutions and banks over her seven-year crypto history.
She stated that she had not been given any reasons, and that no case-by-case assessments were made or discussions held. There was no recourse.
Allan Flynn, another Australian digital currency trader, was awarded a settlement by ANZ after he was debanked on October 15. Although ANZ denied liability, the bank gave him the opportunity to reapply to a bank account. Flynn has an ongoing case against Westpac.
Senator Bragg today addressed the Tech Council and condemned debanking. He said it “undermines Australia’s status as a crypto-hub.”
You can’t open a bank account to trade, mine, invest, custodian, or exchange. You can’t.”
However, things are changing. The Commonwealth Bank, Australia’s first bank to allow customers to purchase, sell, and hold crypto assets via its CommBank app on November 3, announced that it would be the country’s first bank to do so. Bragg says it will be hard for banks to reconcile a negative crypto position once they enter the crypto market.
With the recent entry of banks into crypto, it will be difficult to maintain the position that banks have taken historically. He said today that he would ensure that the banks do not become hypocrites.
Cointelegraph was informed by him that he added to the statement: “It would be hypocritical for customers to use crypto in an app and then de-bank others customers doing the same.” It is a great thing to see banks embrace cryptocurrency.
The “Crypto Report” of the Senate committee published on Oct. 20, and included 12 recommendations to address key issues in the cryptocurrency sector. These included that the Australian government create a clear process for businesses that were de-banked.
Related: Australian crypto companies eager to adopt regulations, senator says
The Australian Transaction Reports and Analysis Centre released a statement on October 29 strongly criticizing de-banking after the report was published.
The report said that “the effect of debanking legitimate and lawful financial service businesses can increase the risk of money laundering and terrorist financing and negatively impact Australia’s economy.”