Australian Bank Bendigo Blocks High-Risk Payments to Crypto Exchanges to Protect Customers

Australian bank Bendigo introduced measures to block high-risk payments to crypto exchanges to combat investment scams and protect users.

It is the fourth Australian bank to implement such a rule despite resistance from the crypto community. The measure came into effect today.

Although the initial announcement might have sounded like a major setback for crypto investors, the bank’s spokesperson clarified that only transactions identified as high risk by the bank will be subject to blocking. The announcement affects approximately 2.3 million users of the bank.

BREAKING:

Australia's Bendigo Bank blocks payments to crypto exchanges

— WhaleFUD (@WhaleFUD) July 31, 2023

Bendigo Tight-Lipped on Measures

When questioned about the bank’s specific criteria for blocking transactions, the spokesperson remained tight-lipped, disclosing only that instant crypto transactions deemed higher risk would be blocked, considering a blend of undisclosed factors. Nevertheless, there was little elaboration on how Bendigo intends to enforce these criteria, or which crypto exchanges may be affected by their latest move the most.

As one of the popular banks in Australia, this move may mean that the already stunted crypto ecosystem in Australia may now face even more difficulties, especially since there have been similar actions undertaken by other banks in recent months, The other three banks who had made similar decisions recently include the National Australia Bank, Westpac and the Commonwealth Bank.

Investors May be Forced to Rely on Unregulated Exchanges

Shortly before this decision gained attention on social media platforms, some from the industry expressed concerns dismay over the bank’s plans.

They voiced concerns that these measures could potentially have adverse effects on the crypto industry in Australia. In particular, the Policy Head of Chainalysis, a well-known blockchain data platform, shared his thoughts during an interview. He emphasized that blocking easy access to crypto could push Australian investors towards unregulated exchanges, which could prove to be even riskier.

The Chainalysis APAC head pointed out that while actions against the increasing crypto scams are essential, an outright block could lead bad actors within the industry to seek alternative methods. Instead, he advocated for a collaborative effort between banks, regulators, telecommunication providers, and social media platforms at every stage of the scam lifecycle.

By working together, these entities can better combat fraudulent activities and protect consumers without limiting access to legitimate crypto opportunities. The discussion surrounding the bank’s decision has sparked a broader conversation about finding a balance between safeguarding users and supporting innovation within the crypto space in Australia.

Related News:

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