Australian Senator Bragg: 'Insidious' debanking of cryptocurrency traders is often anti-competitive

Australian Senator Andrew Bragg says Australia's banks have been disguising anti-competitive behavior as regulatory compliance when de-banking crypto customers.

"I think a lot of banks have been disguising debanking as a regulatory necessity," the NSW Liberal senator said in a prepared speech to the Australian Technology Council. is anticompetitive and far more insidious and threatening than it appears."

Refusal to provide banking services (debanking) is when a financial institution chooses not to provide banking services to its customers. Without giving any reason, the bank has the ability to immediately freeze the account, or close it without notice. For crypto clients, banks often cite anti-money laundering (AML) and counter-terrorist financing (CTF) compliance concerns as the reason for debanking them.

Senator Bragg told Cointelegraph that his Senate committee heard evidence that banks terminated accounts for “commercial reasons” — a practice that “has long been known and noted by the Australian Competition and Consumer Commission (ACCC).”

"In other words, they unblocked their customers' bank accounts to protect their entrenched market position. That wasn't good enough."

In September, Bitcoin Babe founder Michaela Juric testified in a Senate inquiry into "Australia as a technology and financial center" that she had been canceled by a total of 91 banks and financial institutions in her seven-year history with cryptocurrencies.

"No reason was given, no individual case evaluation or discussion took place, and there was no recourse," she said at the time.

On October 15, another Australian digital currency trader, Allan Flynn, reached a settlement with ANZ for being diverted from his banking business. While ANZ denied any responsibility, the bank gave him a chance to reapply for a bank account. Flynn is pursuing a similar suit against Westpac.

Speaking to the Australian Technology Council today, Senator Bragg condemned debanking, saying it "undermines Australia's status as a cryptocurrency hub".

“How can you be a hub if you can’t get a bank account as a trader, miner, exchange, custodian or investor? It’s not possible.”

However, things are changing. On Nov. 3, Commonwealth Bank of Australia announced that it will become the first bank in Australia to allow customers to buy, sell and hold crypto assets through its CommBank app. According to Bragg, when banks themselves start entering the cryptocurrency world, it will be difficult for them to reconcile their anti-crypto stance.

In his speech today, he said: "With banks' recent entry into the crypto world, the positions banks have taken in the past will be difficult to maintain. I will make sure this is not an opportunity for banks to be hypocrites."

He added to that statement, telling Cointelegraph: “I think it’s hypocritical to allow and encourage customers to use cryptocurrencies in apps and then unbank them because other customers do the same. I’m very sorry. Good to see banks getting on the crypto bandwagon.”

The Senate committee’s “Crypto Report,” published Oct. 20, made 12 recommendations aimed at addressing key issues related to the cryptocurrency industry, including the Australian government “developing a clear process for businesses that have already been debanked.”

Following the release of that report, the Australian Transaction Reports and Analysis Center (AUSTRAC) issued a statement on October 29 strongly criticizing debanking:

"The implications of debanking legitimate financial services businesses could increase the risk of money laundering and terrorist financing and negatively impact the Australian economy," the report said.

Cointelegraph Chinese is a blockchain news information platform, and the information provided only represents the author's personal opinion, has nothing to do with the position of the Cointelegraph Chinese platform, and does not constitute any investment and financial advice. Readers are requested to establish correct currency concepts and investment concepts, and earnestly raise risk awareness.