Australian banks claim 40% of scams ‘touch’ crypto as it evades sanctions

Australia’s cryptocurrency industry’s banking problems are likely to continue, with the government and major banks indicating no intention of holding back against scams that “touch” crypto.

During a panel at Australian Blockchain Week on June 26, Sophie Gilder, managing director of blockchain and digital assets at the Commonwealth Bank (CBA), highlighted the bank’s restrictions on crypto exchange payments, which she said were implemented after seeing a worrying rate of I went. About the scams that ended with cryptocurrencies.

“One in three of the dollars defrauded from Australians touched crypto. So that’s the single biggest leverage we have to mitigate this impact on our customers,” she said.

Nigel Dobson, banking services portfolio head at ANZ, cited data from the Australian Financial Crime Exchange, which suggests the figure could be as high as 40%.

On June 8, the CBA followed Westpac in imposing freezes, limits and outright blocks on certain payments to cryptocurrency exchanges, citing an increased risk of investment scams. Australia’s other two major banks, the ANZ and the NAB, have not yet indicated whether they will impose similar restrictions.

A Treasury official confirmed that the steps so far have come at the banks’ own “will”, but that both banks and the government have a “shared view” that crypto scams are “unacceptably high” at this point in time.

“From the government’s point of view, (they) need to invest more to reduce scams, and that’s the government, but it’s also the banks, others in the financial system to keep the scams down to keep the faith in the system.” We have to work together to do that,” said Trevor Power, assistant secretary to the Australian Treasury.

not attack crypto

However, Gilder clarified that the CBA measures were not intended to attack the industry and do not necessarily reflect any wrongdoing by centralized exchanges.

“It is not industry specific. It is based on data, patterns of behavior and identification of bad actors. That’s why we already do it with normal bank accounts. So in that way, there are definitely similarities to what we’re already doing.”

Gilder was also bullish about blockchain technology, noting that almost every bank has established a digital assets team – a sign that “banks recognize the need to understand this area”, he said.

Michael Basina, digital asset lawyer at Piper Alderman and president of Blockchain Australia, who also moderated the session, is looking forward to closer collaboration between banks and industry to tackle the issue of scams.

“Banks put forth statistics of scams touching crypto in some way as a payment rail.”

“It is important to understand that data in greater detail, but what is clear is that businesses in the blockchain and crypto industry need to work closely with banks and payment providers to ensure that scams are prevented as much as possible,” he added. As little as possible.”

reporting from @jessicasier @financial Review He @combank Has banned AUD transfers to “high-risk” crypto exchanges and limited transactions to $10k per month with others with a 24-hour delay. $700,000 per day goes to CBA in the form of fraudulent funds leading to crypto. Banks and the crypto industry…

— Caroline Bowler (@CaroBowler) 8 June 2023

The meeting continues on the decision of the bank Criticism From Australian crypto exchange customers. However, Australian lawyer and senior research fellow at the RMIT Blockchain Innovation Hub, Aaron Lane, defended the banks’ actions.

“Banks and other financial institutions are under increasing pressure to deal with the growing problem of scams involving cryptocurrencies. Imposing time delays, limiting transactions and setting deposit limits are all mechanisms for banks to take back control and limit their legal and regulatory risks.

While these measures “may not be ideal” for Australian-based crypto exchanges and their customers, Lane said a “risk-based approach is better than outright debanking.”

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According to the Australian Competition and Consumer Commission, Australians are set to lose 221.3 million Australian dollars ($148.3 million) from investment scams where crypto was used as a payment method in 2022 – a massive 162.4% increase from 2021.

Power concluded that crypto remains a “significant vector” for scams in Australia, calling on both banks and the government to crack down on the sector.

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