Australian Banks Cleared Of Bitcoin Blocking Accusations

The Australian Competition and Consumer Commission (ACCC) has cleared Australian banks from the accusations related to claims over blocking bitcoin services.

More specifically, the ACCC has ruled that Australian banks involved in the case didn’t commit any wrongdoing when it came to local bitcoin companies’ banking services that had claimed the banks had colluded to block bitcoin competition.

According to The Australian Financial Review, ACCC Chairman Rod Sims said that the investigation that was brought on by Senator Matthew Canavan had no merit. Furthermore, he concluded that there was no evidence backing the claims that banks had attempted to close accounts of bitcoin companies to create competition. Instead, the chairman determined that some banks had simply decided to no longer offer bank services for those companies based on the risks.

The ACCC’s decision, however, was criticized by Senator Sam Dastyari, who said that the regulatory group hadn’t investigated the issue enough, noting that the group also hadn’t reached out to the impacted companies.

“We would hardly have any confidence in our police if they went around asking alleged criminals if they were guilty without interviewing victims … At face value, they could certainly put much more effort into their investigations,” Dastyari said. “If banks consider digital currency, blockchain or bitcoin to be a clear and present risk, then they owe it to the public and to these business owners to confirm as much. Sending chain letters that simply say ‘we can close accounts of whoever we like’ is not good enough, especially when we hear that banks are investing in blockchain companies.”

This issue initially was brought to light after The Australian Financial Review began receiving letters from bitcoin companies claiming that they were being shut out from banks. That eventually sparked an investigation.

But according to Sims, it was the banks’ right to determine which businesses they wanted to do business with, and that it had legitimate reasons to refute business from many companies, particularly bitcoin organizations. He determined that none of the banks had committed any anti-competitive violations.

“It appears that banks have individually decided to stop providing banking services to digital currency businesses in order to ensure their ability to meet their regulatory obligations and manage their risk,” Sims wrote in a letter to the publication.

“The available material also suggests that banks have made their decisions at different times, and with different outcomes. For example, one bank adopted a policy to not deal with digital currency businesses in 2011, while a different bank adopted its policy in June 2015. Some banks remain open to providing services to digital currency businesses on a case by case basis,” he continued.

The main reasons that banks could refuse to maintain the business of bitcoin companies also centered on the issues related to money laundering and counter-terrorism financing, according to Australian Bankers’ Association Chief Steven Munchenberg.

Sims recognized the concerns of the companies, but fended off the senator’s arguments by saying there was a justifiable reason for the banks to act as they did. Still, he noted that the ACCC will continue to monitor similar matters.

“Our investigators are well-trained and can sniff things pretty quickly, and this had the smell of being a very reasonable explanation … but we will keep watching the sector very closely because we are acutely conscious that with new economy startups, we want to make sure that the established players aren’t stopping their progression,” he said.