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Commonwealth Bank will limit customers from sending money to certain cryptocurrency exchanges and implement monthly limits on crypto purchases in an effort to crack down on scams and fraud.
On Thursday, the big four bank introduced a raft of new scam prevention methods, including bans or 24-hour holds on payments to certain crypto exchanges, becoming the second major bank to do so after Westpac took similar action last month.
CBA would not identify the exchanges that would be banned under the new system. However, it’s likely Binance – one of the world’s largest and most popular cryptocurrency exchanges – will be included.
This week, US regulators took action against Binance and Coinbase, another major exchange, accusing them of violating US securities regulations by operating as unregistered exchanges.
It’s the second time Binance has been targeted by US regulators this year, with the US Commodity Futures Trading Commission in March accusing the business of multiple “wilful” breaches of American trading law.
Binance has also been cut off from its local payments provider Cuscal, with users unable to deposit funds onto the platform.
James Roberts, CBA’s general manager of group fraud management services, said the action from US regulators wasn’t behind Thursday’s decision, saying instead the company felt it “had to act” on the rising levels of crypto scams targeting its customers.
“There’s a disproportionate number of scams where the proceeds are flowing out through cryptocurrency exchanges,” Roberts says. “When money goes to those exchanges, we’re finding it almost impossible to recover funds from those entities.”
“It’s not something we’ve taken lightly, as we do appreciate not everyone will be comfortable with the decision, but we have to put our customers’ protection first.”
Roberts says the bank sees a “very high percentage” of fraudulent outflows to crypto exchanges – far beyond what it sees to bank accounts – which he says was the catalyst to act.
CBA has introduced a raft of new anti-scam measures.Credit: Louise Kennerley
“We have to act, we can’t stand by and watch it go any further,” he says.
Further measures set to be rolled out in the coming weeks by CBA include a $10,000 monthly limit for customers transacting with crypto exchanges, which Roberts says will still allow people to trade crypto while limiting the number of “catastrophic” scams.
Australia lacks meaningful cryptocurrency regulation, with the federal government in the process of designing new laws. It’s likely those deliberations will continue into next year.
Roberts says CBA has been an advocate for better crypto regulation, noting the new restrictions could be eased off in the future if scam risks decrease.
“These restrictions are not permanent. Should the risk improve to the point where it’s at an acceptable level, that would be an inflection point for us to review these decisions to make sure we strike the right balance,” he says.
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