Facing a rise in cryptocurrency scams, Australia’s major banks and government remain unyielding in their battle against these frauds. Sophie Gilder, from Commonwealth Bank (CBA), discussed this issue at the Australian Blockchain Week, highlighting the bank’s new restrictions on crypto payments due to this alarming trend.
Gilder revealed a concerning statistic, stating that one in three dollars scammed from Australians is connected to crypto. Nigel Dobson, the Banking Services Portfolio Lead at ANZ, suggested that the figure might be even higher, reaching 40%, based on data from the Australian Financial Crimes Exchange.
Following Westpac’s lead, CBA implemented pauses, limits, and outright blocks on certain payments to cryptocurrency exchanges on June 8, due to the increasing threat of investment scams. However, ANZ and NAB, the other two major banks in Australia, have not yet indicated whether they will follow suit with similar restrictions.
A Treasury official confirmed that the banks’ actions thus far were voluntary, highlighting the shared view between the banks and the government that cryptocurrency scams are unacceptably high. Trevor Power, the Australian Treasury Assistant Secretary, emphasized the need for collaboration between various stakeholders in the financial system to reduce scams and maintain trust.
Gilder clarified that CBA’s measures were not intended as an attack on the crypto industry and did not imply any wrongdoing by centralized exchanges. Instead, the restrictions were based on data analysis, patterns of behavior, and identifying bad actors. Gilder expressed optimism about blockchain technology, noting that most banks have established digital assets teams, indicating their recognition of the importance of understanding the space.
Michael Bacina, a digital asset lawyer and Chair of Blockchain Australia, called for closer collaboration between banks and the crypto industry to address the issue of scams together. He stressed the need for businesses in the blockchain and crypto industry to work collaboratively with banks and payment providers to minimize scams.
Despite criticism from Australian crypto exchange customers, Aaron Lane, an RMIT Blockchain Innovation Hub Senior Research Fellow, defended the banks’ actions.Lane emphasized the increasing pressure on financial institutions to combat cryptocurrency scams and stated that the banks’ measures aim to mitigate legal and regulatory risks.
In 2022, Australians lost AUD 221.3 million ($148.3 million) in crypto-related investment scams, a substantial 162.4% increase from the previous year, according to the Australian Competition and Consumer Commission.
Power stressed that crypto remains a significant avenue for scams in Australia, highlighting the shared responsibility of banks and the government in effectively addressing the issue.
