Australia Banks Close Accounts of Bitcoin Startups, Several Out of Business

Australia's major banks have reportedly closed the accounts of 17 bitcoin companies, forcing at least 13 out of business.

Australia’s major banks have reportedly closed the accounts of 17 bitcoin companies, forcing at least 13 out of business.

Reuters, citing an industry body spokesman, reports that the moves are a result of tougher rules on anti-money laundering (AML) and terrorist financing (TF) in the country.

Join the iFX EXPO Asia and discover your gateway to the Asian Markets

One of the local ‘big four’ banks, WestPac, exited the remittances business a few months ago in order to reduce compliance risks.

“The current bitcoin operating model requires very tough compliance and assurance requirements to ensure we meet the high standards required under anti-money laundering regulations,” a Westpac spokesman said.

Suggested articles

LegacyFX’s Robust Tool Offering Setting it Apart from CompetitionGo to article >>

Most other banks have declined to offer comment on the issue.

An Australian Digital Currency Commerce Association (ADCCA) spokesman said, “We continue to speak with banks to find a solution to the problem. ADCCA looks forward to guidance from the government as to how the situation can be resolved.”

Bitcoin traders are also reportedly having their accounts closed, with one claiming to have been rejected by nine different banks. National Australia Bank, the smallest of the big four, has reportedly been closing the accounts of bitcoin traders since last year.

The closures reflect what would seem to be a highly polarized approach to cryptocurrency by banks in the country. The other three of the big four have embraced cryptocurrency to varying degrees, but more for its technology to help move fiat currency. They have been considering adoption of the Ripple protocol.

Commonwealth Bank of Australia (CBA) CIO David Whiteing envisioned use cases even for cryptocurrencies themselves in banking offerings. And WestPac was recently revealed as one of the investors behind Coinbase’s $75 million funding round, through its venture arm. Coinbase’s wallet, merchant and exchange services cater to bitcoin purely as a currency.

Got a news tip? Let Us Know