Australian Bank to Decline Payments to Crypto Exchanges, Citing Scam Risk

Australian Bank to Decline Payments to Crypto Exchanges, Citing Scam Risk

The largest Australian bank, Commonwealth Bank (CBA), has made a crucial announcement, it would refuse or temporarily freeze some payments to Bitcoin exchanges. CBA executive James Roberts emphasized the rise in “investment scams” involving crypto exchanges, leading to this choice.

Following recent legal actions from the US securities regulator against two significant international exchanges, CCBA made its judgment. Another significant Australian bank, Westpac, banned customers from conducting business with the cryptocurrency exchange Binance just a few weeks ago.

With immediate effect, CBA will reject certain payments made to cryptocurrency exchanges or put them on hold for 24 hours. The bank did not disclose the names of the affected exchanges or the specific payment types involved. CBA stressed that the purpose of these measures is to shield consumers from the hazards of cryptocurrency investment scams.

Additionally, CBA disclosed plans to impose a $10,000 monthly cap on client payments made to cryptocurrency exchanges for cryptocurrency purchases. Authorities anticipate implementing these restrictions in the coming months.

James Roberts, CBA’s fraud management services GM, warns of fraudsters using cryptocurrency hype to deceive investors. They pose as legitimate opportunities or redirect funds to crypto exchanges.

CBA announced that it would continuously evaluate these actions and closely monitor their impact on consumers. CBA’s decision represents a notable reversal after announcing intentions to offer cryptocurrency trading services. The plan aimed to cater to millions of CommBank app users by late 2021. However, due to regulatory issues, the bank was obliged to put off the pilot of its cryptocurrency trading product until May 2022.

CBA’s CEO, Matt Comyn, has warned of the risks of participating in the cryptocurrency market. However, he also acknowledged the potential consequences of ignoring the technology. Recent steps taken by banking regulators have forced the bank to prioritize consumer protection over a swift entry into the Bitcoin market.

Commonwealth Bank faces the challenge of embracing digital assets while safeguarding consumers from emerging crypto industry risks.


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