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A worrying increase in scams tied to cryptocurrency has prompted major Australian banks to maintain their hard stance, despite rising criticisms. The government, too, displays no sign of bending to pressure, emphasizing the need to safeguard the interests of consumers.
At a recent Australian Blockchain Week panel, Sophie Gilder, a key figure at Commonwealth Bank (CBA) in blockchain and digital asset management, highlighted the growing concern. CBA's rigorous restrictions on crypto exchange payments, she pointed out, are due to the skyrocketing scam rate that often ropes in cryptocurrency.
Echoing Gilder's sentiment, Nigel Dobson from ANZ referred to the Australian Financial Crimes Exchange data. He noted that the proportion of scammed Australian dollars connected to crypto might be even more concerning than it appears - around 40%.
These developments led to CBA mirroring the steps taken by Westpac to limit, pause, or block certain transactions to cryptocurrency exchanges. Both financial institutions attribute this move to the escalating threat of investment scams. ANZ and NAB, Australia's two other major banks, are yet to reveal if they plan to impose similar regulations.
Government officials verified that such measures are the banks' own decisions, stressing that both banks and government concur on the currently "unacceptably high" level of crypto scams. Despite ongoing objections from Australian crypto exchange customers, some voices in the legal and research field have supported these preventive actions. Notably, Aaron Lane, a lawyer and senior research fellow at the RMIT Blockchain Innovation Hub, backs the banks' decisions.
2022's staggering 162% increase in investment scam losses using cryptocurrency as the payment method, amounting to $148.3 million, corroborates the banks' cause for concern, as per the Australian Competition and Consumer Commission.
