coindesk.com
An Australian Senate Committee has heard several cases of financial institutions denying or terminating banking services to local cryptocurrency and remittance businesses.
In the Senate Select Committee on “Australia as a Technology and Financial Centre” held Wednesday, two crypto exchanges, Aus Merchant and Bitcoin Babe, testified to their repeated denial of services, often with no explanation given by the institutions that denied them.
The purpose of the committee is to review the federal policy framework around cryptocurrency and blockchain technology in the country.
Michael Minassian, regional head of global payments firm Nium, testified that Australia was the only country of 41 others to have denied banking for Nium’s remittance services.
Bitcoin Babe founder Michaela Juric told the committee her banking services had been terminated 91 times over the course of her small business’ seven-year history.
The committee also heard that Juric and family members had been denied personal banking services, which impacted their ability to establish basic utilities such internet service, water and electricity, as well as self-managed retirement funds and insurance.
Anti-competitive behavior
Juric said little to no reason had been given for her debanking and that an “anti-competitive” stance was being undertaken by the banks because of a perceived threat crypto posed to traditional finance.
“They didn’t like that there was this competition coming through that bitcoin and other cryptocurrencies posed.”
In her submission to the committee, Juric said there was “no opportunity for discussion” over her being debanked from some of the country’s largest banks including Commonwealth (CBA), Westpac, and Bank of Queensland.
The debanking from CBA was “particularly hurtful” to Juric, the submission reads who said she was also personally debanked from all accounts she held with CBA. This included an account she had held since five years old. Juric stated she is no longer able to access any bank account records or open an account with CBA.
Aus Merchant’s managing director Mitchell Travers provided evidence to the committee claiming he had been debanked on four occasions.
“As far as I am aware it was a risk avoidance, risk-off attitude,” Travers said. “The reasoning was that we were outside the scope of services for these banks and we weren’t given an opportunity to provide enhanced due diligence procedures.”
Senator Andrew Bragg asked Travers if his company’s registration to the country’s financial watchdog Austrac was worthless in the bank’s eyes.
“Yes, that’s correct,” said Travers. Juric also said her Austrac registration was never brought up by the banks.
Bragg said the banks had told him the reason for debanking crypto businesses was due to a “lack or low level of regulation” within the industry, and asked whether increasing regulation for crypto markets would eliminate the banks reasoning.
“Sure that’s a possibility,” said Juric who also highlighted the potential for big banks to muscle their way into the industry and threaten small crypto businesses as well as defuncting the entire industry.
“Increased regulation on the custody side is very important ... on the side of licensing we have to be very careful because of the nature of the technology, it tends to evolve every year if not every month.”