Australian Bank to Refuse 'Specific' Payments To Cryptocurrency Exchanges

Australian Bank to Refuse ‘Specific’ Payments To Cryptocurrency Exchanges

Updated: 08 June 2023

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The Commonwealth Bank’s James Roberts discussed many crypto exchange “investment scams.”

Commonwealth Bank Takes Action to Protect Customers from Crypto Scams

Due to scam concerns, Commonwealth Bank (CBA) is rejecting or temporarily delaying certain payments to cryptocurrency exchanges. The move is part of CBA’s efforts to protect customers from fraud. Cryptocurrency exchange transactions have also been monitored and restricted by other banks in Australia.

A US securities regulator is suing two big global exchanges right now. Moreover, it comes on the heels of Westpac prohibiting its customers from transacting with Binance.

The regulator alleges that the two exchanges allowed illegal securities trading on their platforms. The lawsuit is part of a larger effort to crack down on unregistered and unregulated securities trading.

As part of “new measures to help protect customers from scam risks associated with making certain payments to cryptocurrency exchanges,” CBA said it would decline or hold “certain payments to cryptocurrency exchanges,” CBA said that this decision was made to protect CBA customers from potential fraudulent activity. The bank has also increased fraud monitoring and implemented additional measures to reduce scam risk.

Currently, CBA isn’t sharing any additional details about the specific payment types it will block or delay with the public or its customers. According to them, this stops scammers from bypassing the new measures.

Customers who want to send money to crypto exchanges to buy cryptocurrencies will soon have a limit of $10,000 per month. The limit is about $6,650. This limit protects Customers from any potential risks associated with investing in cryptocurrencies. KYC (Know Your Customer) regulations require banks and other financial institutions to abide by the limit.

“From today, CBA will decline or hold for 24 hours certain payments to cryptocurrency exchanges. In coming months, the Bank will also introduce $10,000 limits in a calendar month where the Bank can identify the customer payments are to exchanges for cryptocurrency purchases,” it said.

CBA Adapts Crypto Strategy Amid Scammer Concerns

According to James Roberts, CBA’s fraud manager, “scammers globally are capitalizing” by offering “legitimate investment opportunities or diverting funds into cryptocurrency exchanges.”

Measures will be “subject to ongoing review,” and the bank will monitor their impact.

The bank’s strategy has changed dramatically. Over a year and a half ago, in November 2021, it was about to launch crypto trading services for its extensive app users. However, the plans were put on hold due to regulatory uncertainties. The bank has focused on other services, such as digital payments and wealth management solutions.

According to Matt Comyn, the bank sees “risks in participating, but we see bigger risks in not participating” and added, “the sector and the technology [isn’t] going away anytime soon.”

Comyn, the bank’s CEO, was dealing with regulators about the launch in May 2022. However, the country’s financial regulators stopped the crypto-trading product pilot.

Comyn was disappointed but accepted the decision. As a result, he decided to focus on other projects, like expanding their digital banking platform. In the near future, he’ll meet with regulators again about crypto-trading.

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