Australian banks freezing transactions with crypto exchanges, investors say

Cryptocurrency investors in Australia are reporting their accounts with some of the country’s leading banks are being frozen, ostensibly due to transactions with cryptocurrency exchanges.

A tweet addressing the issue from investor and YouTube publisher Alex Saunders went viral on Tuesday, flagging the restrictions which appear to have affected those transacting with four of the leading cryptocurrency exchanges in Australia.

Accounts with banks Westpac Banking Corporation, National Australia Bank, ANZ and the Commonwealth Bank of Australia have been affected so far, with transactions between bank accounts and exchanges Coinbase, Coinspot, BTC Markets and CoinJar triggered thus far.

With users branding the move ‘appalling’ and ‘disgusting,’ the Twitter storm around the issue has thus far attracted hundreds of comments, likes and retweets. The banks, however, have defended the move on an individual basis, citing cryptocurrency transactions as a ‘security risk,’ despite threats of mass customer switching.

For the time being, the banks concerned have not made any official statements regarding the issue, and there are no published bank-wide policies that would restrict transactions with cryptocurrency exchanges.

Despite that, some investors are concerned the move could represent an attempt by the banks to clamp down on cryptocurrencies, and the threat posed by digital currency to the current mainstream financial system.

Yet while there are no firm policies preventing users from transacting with cryptocurrency exchanges, some do mention virtual currencies, and SegWit1x (BTC) by name, “because the destination account previously has been connected to a fraud or an attempted fraudulent transaction or is an account used to facilitate payments to Bitcoins or similar virtual currency payment services.”

As a result of the issues experienced so far, CoinSpot has temporarily halted all deposits in AUD. Addressing their customers, CoinSpot said the decision had been taken following the raft of closures, as a temporary measure before ironing out these issues.

“We assure you we are just as unhappy with the situation as you, but unfortunately Australian banks have been so far unwilling to work with the digital currency industry which leads to frequent account closures and strict limits on accounts whilst they remain operational, in effect debanking our industry,” according to CoinSpot.