Emerging reports from Twitter leading to discussions on Reddit indicate that Australian banks are freezing accounts of persons involved in cryptocurrency trading, particularly Bitcoin.
The move has caused tension among Bitcoin traders, who happen number more than traders dealing with any other cryptocurrencies in the country.
Following a tweet by Alex Saunders that went Viral among members of the Bitcoin community in the country and abroad, Australian and international news outlets have had something to share with their readers.
Australia’s Cryptocurrency Scene
Alex Saunders is a Bitcoin enthusiast and trader, as is evident from his Twitter account. Apart from that, he also runs a YouTube channel where he shares some tips about Bitcoin and how to get involved in it.
In his tweet, he lashed out at some of the top banks for disabling transfers to well-known Bitcoin exchange platforms. Of course, he and his colleagues with interest in digital currencies may have fallen victims and thus decided to take it to social media.
The banks mentioned in the tweet are the Commonwealth Bank of Australia, ANZ Bank, National Australia Bank (NAB), and Westpac Banking Corporation.
According to Saunders’s tweet, all of the said banks have frozen the accounts of crypto traders and prevented transfers of funds to major Bitcoin exchanges including BTC Markets, CoinJar, CoinBase, and CoinSpot.
Given the fact that Australia is among the top 10 countries to have a majority of citizens and businesses engaging with Bitcoin, and the sizes of the banks mentioned, a large amount of people are likely to be affected by the move.
It is not the first time that reports of banks in the country freezing accounts of Bitcoin traders have emerged.
Some time back, several Bitcoin startups were forced to shut down and change locations due to the high taxes as well as the possibility of funds getting frozen.
Despite this, a recent report shows that as years go by, more Australians have gained interest in Bitcoin and other cryptocurrencies.
The increase in the adoption of Bitcoin is mainly attributed to the fact that the country ended its double taxation on the digital currency, confidence in the cryptocoin and more so because no law states its illegitimacy.
In short, it is regarded as an asset, and if one wished to trade it, then there would be no illegality in doing so.
Cryptocurrency inBanking Laws
According to recent research carried out by Australian researchers, it is revealed that nearly half of all the Bitcoin transactions that take place have a direct relation to the dark web, or rather the acquisition or sales for the various, often illegal, goods and services available on it.
The other half represents those who are just interested in trading or investing in Bitcoin; in other words, waiting for the value to hike and flipping it to make a profit.
According to the source, the main aim is to help policymakers and government institutions understand the various challenges that are associated with competently drafting laws to be used for cryptocurrencies.
One ought to understand a concept before trying to formulate rules that will be used for regulatory purposes.
Perhaps the financial institutions in Australia understand the issues raised by the researchers who drafted the report, and thus the reasoning was to take measures to prevent a various form of illicit transactions from occurring in compliance with anti-money laundering and know your customer (KYC) laws.
However, the problems faced have made some of the Bitcoin exchanges, such asCoinSpot, restrict deposits in Australian Dollars due to the issues with the bank.
Given that Australians are among the most prominent users of Bitcoin, the restriction is likely to affect hundreds of thousands of users, if not millions.
The affected parties raised concerns and expressed their displeasure at the move taken by the banks. Some consumers threatened to shift base and open new accounts with other financial institutions.
But to others, the response from the banks about the outcry and threats was that they were dealing with a transaction that may pose a security risk.
All banks have terms and conditions which their customers must follow to have their accounts created and maintained in good standing.
Among these rules, depending on the institution, is that they reserve the right to decline to process a payment if it does not meet their desired criterion – as is the case for the Commonwealth Bank.
A bank representative made it clear that they do not use, recommend or advise people in how to trade in Altcoins as the technology lacks proper regulations as compared to currencies which are under the control of the Central bank of a given country.
Most of the Australian banks that have been mentioned in this case have given various views and responses on the topic, but none are satisfactory to those who have had their accounts closed.
For instance, despite the fact that a bank like NAB does not prevent customers from engaging in trading of Bitcoins, it does not support the cryptocurrency. It seems that much will need to be done for users to comfortably have faith with the financial institutions to not to freeze their accounts.
Previous reports suggest that there is a possibility that the funds in question might be proceeds from money laundering schemes initiated in other parts of the world, and perhaps the reason why Australian banks fear they could be used as avenues of storing profits from illegal businesses, thus acting on their right to take strict and urgent measures.