Australia’s banks are reportedly being investigated by the Australian Competition and Consumer Commission (ACCC) following the recent account closures of Bitcoin businesses.
At least 17 Bitcoin startups reportedly had their accounts closed, forcing several out of business. An industry body spokesman reportedly said at the time that the closures were a result of tougher rules on anti-money laundering (AML) and terrorist financing (TF) in the country.
But Senator Matthew Canavan, who requested the investigation, suggested that the actions were anti-competitive because digital currency competes with banking business models.
ACCC chairman Rod Sims told The Australian Financial Review that the Commission has started an investigation, which is in its early stages. It has requested an explanation from the banks for the moves.
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The country’s major banks have themselves been exploring the potential of blockchain technology, which powers Bitcoin and other digital currencies, to improve their own processes. National Australia Bank (NAB) recently joined the other three members of the ‘big four’ already exploring the blockchain, entering a startup-led consortium of global banks looking to develop and standardize the technology.
Australian Bankers’ Association (ABA) CEO Steven Munchenberg denied the allegations of anti-competitive behavior, instead pointing to the AML/TF risks posed by Bitcoin.
“We take every suggestion of anti-competitive behavior incredibly seriously. It is a very serious allegation to make against the industry, so at this stage we will be focusing on proving that those allegations are totally unfounded,” he said, adding that the allegations “are just nonsense.”
He further argued that those alleging the “anti-competitive conspiracy” theory will have to bring evidence. He also claimed that digital currency proponents have approached him with arguments that they shouldn’t have to comply with AML/TF regulations because “it is terribly expensive and a terrible burden for them.” Such behavior, he said, would only further heighten the banks’ concern.