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UPDATE: ACCC To Investigate Aussie Banks Over Bitcoin Shutout
UPDATE: The ACCC has confirmed that it will investigate whether Australia’s major banks are acting unlawfully in their decision to close the accounts of Australian-based bitcoin traders.
ABC reports that Australia’s competition watchdog confirmed its intent to look into the closures on behalf of Queensland Nationals Senator Matthew Canavan, who sat on the Senate committee on bitcoin and other crypto-currencies.
“It appears to me to be an amazing coincidence that a number of large banks have all of a sudden decided to deny services to fledgling Bitcoin and digital currency operators,” said Senator Canavan, who believes the closures may be a deliberate, coordinated attack on the digital currency industry. “They are clearly competitors to their business model, albeit small ones at this stage, and there are clear laws that we’ve got against businesses refusing to supply other businesses if they do so for an anti-competitive purpose.”
“I think the ACCC should be asking the banks some serious questions about why they’ve done this and on what legal grounds they believe that they should not be providing services to bitcoin operators.”
In addition to freezing out the accounts of companies specialising in bitcoin trading, the shutout has also affected bitcoin using individuals, with some having been blacklisted by nine major financial institutions across the country.
“I was thinking of hiring somebody, I could have had an extra developer working with me right now, and instead I’m out of a job and out of income trying to figure out what to do,” affected trader Daniel Wilczynski told ABC.
Bitcoin users in Australia are in for a rude awakening this morning, as representatives of Australia’s leading banks have notified Australian bitcoin traders that their accounts are to be closed.
Bitcoin exchanges Buyabitcoin and Bit Trader are among 17 others that have received letters from the likes of Westpac, Commonwealth Bank and other major banking players, informing them that they will be withdrawing their banking services, effectively crippling companies reliant on bitcoin in Australia.
Australian Digital Currency Commerce Association Chairman Ron Tucker told AFR that all large Aussie banks were shutting the door on bitcoin companies without explanation or negotiation.
“Our members have been unable to obtain any formal clarification on the reasons for closure, except for references to policy or risk,” Tucker, also the founder of Bit Trader, told AFR. “Just what policies or risks these are have not been specified.”
“The industry is more than happy to talk to the banks about their concerns. However, neither the association nor its members have been given the opportunity.”
Banking is one of the major sectors subject to disruption from the emergence of crypto-currencies, with new financial services popping up to support bitcoin and its ilk threatening to take the place of traditional banks. While current Australian Tax Office policy states that bitcoin is treated as a form of property, and therefore subject to high tax rates on trading, a Senate committee launched last year is expected to recommend that crypto-currency be treated as a form of currency, in line with shifting sentiments towards bitcoin overseas.
“It is widely recognised that the banking sector could stand to be disrupted,” Tucker told AFR. “Companies in this industry are in the business of offering and developing cost-effective financial services for consumers and businesses.”
The news follows developments that Commonwealth Bank has joined banks around the world in an effort to develop its own form of the ‘blockchain’ technology that powers bitcoin, in an effort to streamline the process of transferring funds between countries (AFR). The possibility that CommBank’s efforts to duplicate bitcoin technology and simultaneously shut out local bitcoin traders could be linked isn’t lost on commentators.
“I am concerned that there is an allegation that Australian banks are deliberately choking small businesses, while setting themselves up to offer the same services,” Sam Dastyari, Australian Senator and chairman of the committee that investigated digital currency, told AFR. “We don’t have a four-pillars policy to allow banks to guillotine emerging industries they are competing with.”
CommBank and Westpac refused to comment on the closures beyond concerns that a lack of transparency and regulatory oversight makes bitcoin a favoured tool for money launderers and online black market traders.
“Given the risks, there is a need for a clear and settled legal and regulatory framework for digital currencies,” Australian Bankers Association Acting CEO Tony Pearson said.