Multiple reports have emerged alleging Australian banks to be freezing bank accounts belonging to individuals trading in bitcoin, altcoins, and other digital assets. Following an initial tweet describing the issue on December 28, 2017, other Twitter users have also come forth with similar reports.
So far, it seems as if National Australia Bank, ANZ, Westpac Banking Corporation and Commonwealth Bank of Australia are complicit in freezing accounts of known cryptocurrency users. Furthermore, according to the tweet above, these banks have begun halting all transfers from accounts associated with certain cryptocurrency exchanges citing suspicious activity. At this time, the websites that trigger the freeze appears to be BTC Markets, CoinSpot Australia, CoinJar, and Coinbase.
Since no official announcement has been made as of the time of writing this article, it is uncertain why Australian banks are targeting users of cryptocurrencies or whether the issue is more than just a few isolated incidents being propagated throughout the internet. A Commonwealth Bank of Australia spokesperson stated that the financial institution’s customers are free to “interact with these currencies as long as they (customers) comply with the bank’s terms and conditions and all relevant legal obligations.”
CoinSpot Australia, one of the exchanges affected by the incident, has since added a message on their website claiming that the situation is a result of Australian banks being unwilling to work with the digital currency industry, resulting in frequent account closures and strict limits on the ones that remain operational. An update provided January 3 states that the “temporary restriction on AUD deposits will remain in effect until at least the first week of the new year.”
On the other hand, the founder of CoinSpot, Russell Wilson, claimed that he was not aware of any new widespread issue involving Australian banks but said that the situation was being monitored. None of the other exchanges or banks involved in the controversy have released statements.
Unsurprisingly, financial institutions, not just those in the Australian continent, have opposed the concept of cryptocurrencies for some time now. Reports of bank managers and financial advisors in the United States strongly rivaling cryptocurrencies can be found in abundance on any major cryptocurrency forum, particularly Reddit and bitcointalk. However, incidents such as the alleged one in Australia that involves several banks concurrently targeting users en masse are much more infrequent.
A popular Australian bitcoin enthusiast also tweeted about an ongoing battle with Australian banks, further indicating a potential problem with the banking infrastructure in the country. Given that the vast majority of digital currency traders and investors have to rely on their bank accounts to move their assets between fiat and cryptocurrency, the apparent heavy-handedness of banks in this aspect is a very telling tale of how much control still lies in their hands.
The ongoing controversy in Australia presents an even stronger case for bitcoin and other cryptocurrencies due to their decentralized and distributed nature. In the absence of any central institution or regulatory authority controlling their circulation and use, it is impossible for these problems to affect users of such currency. However, the current adoption rates of digital currencies are so insignificant that the dominance of financial institutions will continue to be unrivaled for some time now.