Bendigo Bank’s Protective Measures: Restricting High-Risk Transactions with Crypto Exchanges

Bendigo Bank, one of Australia’s prominent financial institutions, has recently joined the ranks of major banks in the country by announcing the implementation of blocks on “high-risk crypto payments.” The decision comes as part of the bank’s effort to shield its 2.3 million customers from potential investment scams.

On July 31, Jason Gordon, the head of fraud at Bendigo Bank, revealed that the new rules were put in place to add an extra layer of security to certain genuine payments involving instant transactions to crypto exchanges. The bank aims to combat fraudulent activities and enhance protections for its customers through these measures.

While Bendigo Bank confirmed the existence of these blocks, the specifics of the high-risk transactions that would be restricted were not disclosed. A spokesperson for the bank mentioned that a combination of factors is used to identify such transactions but refrained from providing further details. Additionally, the bank did not disclose which crypto exchanges might be affected by these changes.

This move follows similar actions taken by three other major Australian banks, namely Commonwealth Bank, National Australia Bank (NAB), and Westpac, in recent months.

Chengyi Ong, the APAC Policy Head at Chainalysis, expressed concerns before Bendigo Bank’s announcement. Ong warned that such restrictions could lead Australia’s crypto community to interact with offshore exchanges, and it may not deter criminal actors from finding alternative platforms, whether crypto-related or not. He emphasized the importance of collaboration between banks, regulators, telecommunication providers, and social media platforms to address the entire scam lifecycle effectively.

Dr. Aaron Lane, a senior lecturer at the RMIT Blockchain Innovation Hub, echoed similar sentiments, stating that instead of severing ties with crypto exchanges, banks should work constructively with them. He urged that de-banking should be reserved for individual cases of serious risk rather than adopting a blanket approach towards the entire crypto industry or asset class.

The issue of crypto-specific legislation has been under discussion in Australia for over three years. Dr. Lane called for lawmakers to take the necessary steps to reform crypto laws, suggesting that it should not be deemed too difficult to address.

The Department of the Treasury also weighed in on this matter in June, issuing a statement with similar warnings. The Treasury expressed concerns that inaction on de-banking could suppress financial services competition and innovation, potentially driving businesses underground and pushing them to operate solely with cash.

In conclusion, Bendigo Bank’s decision to block high-risk crypto transactions is part of a broader effort within the Australian banking sector to combat investment scams and protect customers. However, it remains to be seen how these measures will impact the crypto community and whether they will lead to further developments in crypto-related legislation in the country.

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