HSBC Australia Halts Payments To Crypto Exchanges Citing Scams

HSBC’s Australian division informed customers that it will block payments to cryptocurrency exchanges starting 24 July 2024. The move makes HSBC the latest major financial institution to take a stand against the crypto industry, citing concern over scams.

“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,” HSBC Australia said in an email to its customers.

The bank advised customers wishing to engage with crypto exchanges to find alternative payment methods.

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Bendigo Bank Follows HSBC’s Suit

HSBC said its decision is backed by alarming statistics from Australia’s competition and consumer regulator, which reported that Australians lost up to $171 million to investment scams in 2023.

Following HSBC’s announcement, Bendigo Bank, another Australian financial institution, also decided to implement similar measures to protect its customers from investment frauds.

Despite the new restrictions, HSBC said that it would continue accepting payments originating from cryptocurrency exchanges, maintaining normal banking operations. HSBC Australia currently serves 1.5 million customers through its 45 branches nationwide.

HSBC Australia banning transfers to CEX's "for your protection"

Let me rephrase it as you mean it @HSBC

"so we can keep as much fiat as possible within our archaic infrastructure and prop up our bonuses for the best interests of our customers"

Crypto will prevail pic.twitter.com/9q7shr6hTz

— Shark 🦈 $8332 (@CardanoShark) July 24, 2024

Amy-Rose Goodey, Managing Director of the Digital Economy Council of Australia (DECA), expressed surprise at HSBC’s abrupt decision. She said the move underscores the persistent challenges in the relationship between Australian banks and the cryptocurrency sector.

“The recent decision by HSBC to block all payments to cryptocurrency exchanges has reignited concerns about the ongoing challenges facing the relationship between Australian banks and the cryptocurrency sector,” said Goodey.

Goodey warned that without open dialogue, Australians might miss out on participating in the digital economy. She advocated for the establishment of “clear, fair, and forward-thinking regulations” to enable banks and the industry to combat scams without stifling innovation.

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Crypto Under Scrutiny in Australia

Australia has been intensifying its scrutiny of the cryptocurrency industry in recent times.

Last year, officials from the Australian Securities and Investments Commission (ASIC) searched Binance Australia’s offices.

In March, Australia’s prudential regulator instructed banks to report their exposures to crypto firms and startups. This command followed the collapse of Silicon Valley Bank.

The Australian Prudential Regulation Authority (APRA) called for improved reporting on crypto assets and requested daily updates from banks to gain deeper insight into potential vulnerabilities in the system.

Additionally, in October, the Australian government proposed subjecting digital asset platforms to the same laws that govern other financial services providers.

The plan includes crypto platform operators obtaining a financial services license, implementing continuous monitoring, and conducting routine audits of customer funds.

More recently, the Australian Taxation Office (ATO) initiated a crypto tax crackdown, demanding personal and transaction data from up to 1.2 million crypto exchange accounts.

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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.