Major Australian bank to decline ‘certain’ payments to crypto exchanges

Commonwealth Bank (CBA), the largest bank in Australia, has announced that it will refuse or temporarily hold specific payments to cryptocurrency exchanges due to the prevalence of investment scams.

Major Australian bank to decline ‘certain’ payments to crypto exchanges

This decision follows the recent legal challenges faced by two major global exchanges from the United States securities regulator, as well as the ban imposed by another major Australian bank, Westpac, on customer transactions with crypto exchange Binance.

On June 8, CBA stated that it would decline or impose a 24-hour hold on "certain payments to cryptocurrency exchanges." The bank did not specify which exchanges or payment types would be affected by these new measures.

In a statement, CBA explained that it has implemented these measures to protect customers from scam risks associated with certain payments to crypto exchanges. The bank also revealed its plan to introduce a monthly limit of 10,000 Australian dollars ($6,650) on customers sending funds to crypto exchanges for purchasing cryptocurrencies in the coming months.

James Roberts, the general manager of CBA's fraud management services, highlighted the global exploitation of crypto interest by scammers who present themselves as legitimate investment opportunities or divert funds into crypto exchanges.

CBA emphasized that these measures would be subject to ongoing review, with the bank monitoring their impact.

This decision marks a significant reversal for the bank, considering that just a year and a half ago, in November 2021, it had plans to launch crypto trading services for the millions of users of its CommBank app. At that time, the bank's CEO, Matt Comyn, acknowledged the risks involved but believed that the greater risks lay in not participating, stating that the sector and technology were here to stay.

As recently as May 2022, Comyn was engaging with regulators regarding the launch of the crypto-trading product. However, financial regulators in the country prevailed, resulting in the suspension of the pilot for the crypto-trading product.