HSBC Australia Halts Crypto Exchange Payments, Citing Scam Concerns
In a move that echoes recent actions by other major Australian banks, HSBC Australia has announced it will block all customer payments to cryptocurrency exchanges starting July 24, 2024. The decision, communicated to customers via email, is part of the bank’s new safety measures aimed at protecting clients from rising investment scams.
HSBC Australia cited data from the country’s competition and consumer regulator, revealing that Australians lost up to $171 million to investment scams in 2023. This staggering figure has prompted the bank to take decisive action, despite acknowledging the inconvenience it may cause some customers.
“From 24 July 2024, HSBC will block payments from bank accounts and credit cards that we reasonably believe are being made to cryptocurrency exchanges, for your protection,” the bank stated in its communication to customers. HSBC advised clients seeking to make payments to crypto exchanges to “make alternative arrangements.”
This move aligns HSBC Australia with the country’s “Big Four” banks – Commonwealth Bank, National Australia Bank, Westpac, and Australia and New Zealand Banking Group – all of which implemented similar restrictions approximately a year ago. Bendigo Bank has also followed suit, citing the need to safeguard customers from investment scams.
The decision has reignited discussions about the relationship between traditional banking and the cryptocurrency sector. Amy-Rose Goodey, Managing Director of the Digital Economy Council of Australia (DECA), expressed concern about this “concerning trend” of restrictions affecting the digital currency community. Goodey emphasized the need for improved dialogue and regulatory frameworks that balance innovation with effective risk management.
“It underscores the critical need for dialogue and improved regulatory frameworks that support innovation while addressing potential risks effectively,” Goodey stated, warning that without proper communication, more Australians could lose their “financial right” to participate in the growing digital economy.
While HSBC Australia is blocking outgoing payments to crypto exchanges, the bank clarified that it would continue to accept incoming payments from these platforms. The bank, which serves 1.5 million customers through 45 branches across Australia, assured that other banking services would remain unaffected.
This development comes as Australia’s financial crime watchdog, AUSTRAC, has heightened its warnings about potential money laundering risks associated with cryptocurrencies. The agency has identified high vulnerabilities in digital currencies used for payments and forecasts increasing risks in this area.
