Australian Banks Cite Crypto’s Involvement in 40% of Scams Amid Defense of Restrictions

Australia’s major banks and the government are standing firm on their restrictions related to cryptocurrency, citing the prevalence of scams that involve digital assets. During a panel discussion at the Australian Blockchain Week, Sophie Gilder, Managing Director of Blockchain and Digital Assets at Commonwealth Bank (CBA), revealed that one in three dollars scammed from Australians is connected to crypto. Nigel Dobson, Banking Services Portfolio Lead at ANZ, referenced data suggesting that the figure could be even higher, at 40%.

The move by CBA and Westpac to impose limits and blocks on certain payments to crypto exchanges was prompted by an increasing threat of investment scams. While ANZ and NAB have not yet followed suit, a Treasury official confirmed that the government and banks share concerns about the high occurrence of cryptocurrency scams and the need to combat them to maintain trust in the financial system.

Gilder emphasized that the measures taken by CBA are not an attack on the crypto industry and do not imply any wrongdoing by centralized exchanges. Instead, they are based on data analysis, patterns of behavior, and the identification of bad actors. She also highlighted that nearly every bank now has a dedicated digital assets team, indicating their recognition of the importance of understanding the blockchain space.

Michael Bacina, Digital Asset Lawyer and Chair of Blockchain Australia, expressed the need for collaboration between banks and the industry to tackle scams together. While the banks’ figures regarding scams involving crypto payments are cause for concern, Bacina emphasized the importance of detailed data analysis and collaboration to reduce the occurrence of scams.

Criticism from Australian crypto exchange customers has persisted, but Aaron Lane, an Australian lawyer and senior research fellow at the RMIT Blockchain Innovation Hub, defended the banks’ actions. He explained that the measures, while not ideal for crypto exchanges and customers, are aimed at mitigating legal and regulatory risks and represent a risk-based approach rather than outright debanking.

According to the Australian Competition and Consumer Commission, Australians lost AUD 221.3 million ($148.3 million) in investment scams involving crypto payments in 2022, marking a significant increase from the previous year. The government and banks recognize that crypto remains a prominent avenue for scams in Australia and are committed to addressing the issue.

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