Commonwealth Bank of Australia Begins Restricting Payments to Crypto Exchanges

Commonwealth Bank of Australia has started declining or holding for 24 hours certain payments to cryptocurrency exchanges.

Within months, the bank will also begin limiting customer payments to exchanges for cryptocurrency purchases to 10,000 Australian dollars (about $6,700) in a calendar month, Commonwealth Bank said in a Thursday (June 8) press release.

“With the incidences of scams increasing and in many cases customers suffering significant losses from being scammed, the introduction of 24-hour holds, declines and limits on outbound payments to cryptocurrency exchanges will help reduce both the number of scams and the amount of money lost by customers,” James Roberts, general manager of group fraud management services at Commonwealth Bank, said in the release.

Scammers have been capitalizing on consumers’ growing interest in cryptocurrencies, and customers making payments to crypto exchanges face “significantly higher risk” of being scammed, Roberts said in the release.

Commonwealth Bank’s new measures will be subject to ongoing review, with the bank closely monitoring their impact, according to the release.

“While these measures will not eliminate the risk of customers suffering losses as a result of a scam that involves a payment to a cryptocurrency exchange, they are part of a range of initiatives designed to help customers reduce their risk of falling victim to a scam,” Roberts said in the release.

These moves come a month after another Australian bank, Westpac, blocked some payments to cryptocurrency exchanges, citing losses to scams, Reuters reported Thursday.

When announcing the rollout of its measures in May, Westpac said investment scams account for about half of all scam losses and that one-third of all scam payments are transferred to a crypto exchange.

Commonwealth Bank’s changes also come weeks after the cryptocurrency exchange Binance Australia told customers they would lose access to Australian dollar deposits and withdrawals, leading to customers scrambling to leave the platform, according to the Reuters report.

In the United States, the Securities and Exchange Commission (SEC) has said that every crypto exchange is violating securities laws.

The regulatory agency has targeted both Binance, the biggest global crypto exchange, and Coinbase, the biggest U.S. crypto exchange, with lawsuits.

The SEC also sued crypto exchange Bittrex in April for allegedly operating an illegal securities exchange.