National Australia Bank (NAB) Joins Cryptocurrency Exchange Boycott, Banning ‘High-Risk’ Exchanges
Mitchell Nixon
Starting Monday, National Australia Bank (NAB) will enforce payment blocks to high-risk cryptocurrency exchanges, potentially including Binance. This measure is aimed at curbing fraud and scams within the financial institution.
Major banks in Australia have been intensifying their efforts to clamp down on digital currencies, as scammed funds often flow into cryptocurrencies, making it exceedingly difficult for victims to recover their losses.
This includes Westpac who also blocked payments to Binance.
Commonwealth Bank also did the same.
For Binance, this action adds further strain to its operations, following a regulatory raid on its offices by the corporate regulator amid a broader regulatory crackdown on the contentious exchange led by the United States.
During the period from March to July 2023, NAB suspended millions of payments and concurrently plans to implement restrictions on “certain cryptocurrency platforms” to safeguard customers from scams.
While NAB did not disclose the specific names of the targeted cryptocurrency exchanges, Chris Sheehan, NAB’s executive for group investigations and fraud, indicated that the blocks will be imposed on “high-risk” platforms known for their prevalence of scams.
In explaining the bank’s decision, Sheehan emphasised that these scammers operate as part of organised, transnational crime groups and increasingly exploit cryptocurrency platforms to rapidly transfer stolen funds, often to international destinations.
You can read NAB’s statement here.
NAB’s head of fraud, Chris Sheehan, refrained from revealing the specific cryptocurrency exchanges the bank would ban, but mentioned that initially, the ban would be imposed on “several” exchanges, with the possibility of further expansion in the future.
He explained, “You’ve got ‘crypto exchange A’ that we have concerns with, and we’re not going to allow payments to go there. If we start to see, as always happens with these criminal groups, they pivot to start targeting something else, we can change our rule settings as we go.”
When asked directly about whether the ban would include Binance, he responded, “our approach is going to be consistent with the rest of the industry.”
In addition to the ban, Binance has faced the loss of its local banking partner Cuscal, which facilitated payments via PayID and other methods, and the Australian Securities and Investment Commission (ASIC) has revoked its local derivatives licence.
In their announcement, NAB reiterated the prevailing stance of local banks, stating that nearly 50% of scam funds reported in Australia are associated with cryptocurrencies.
The statement from NAB further highlighted the alarming growth of cryptocurrency scams, resulting in Australian citizens losing over $221 million to such frauds last year. The authority also pointed out that 40% of Australians expressed a willingness to accept slower payment processes if it meant having better protection against scammers.
Seems rather sad that people get scammed, but at what point is this not a free market?
What about all the users that understand the risks and don’t fall for scams that use these banks to access cryptocurrency exchanges to invest? To give themselves access to this great technology?
Australia is fast falling behind in the world of regulation. Let’s hope they don’t fall too far behind.