The regular financial sector seems to create barriers to smooth cryptocurrency trading – from giving up bank tables to trading cryptocurrencies to closing accounts owned by the platforms. Without bank support, stock exchanges often have to rely on other cash platforms to service their customers’ deposit and withdrawal needs.
The apparent discrimination of cryptocurrency exchanges goes beyond denying banking services. In countries such as South Korea, banks have increased the level of supervision associated with renewing operating licenses for platforms. The costs of complying with these additional rules led to many smaller stock exchanges leaving the country.
These banking practices for cryptocurrencies are often based on arguments that cryptocurrencies are a channel for illegal activity. However, evidence from studies by several sources shows that the claim that cryptocurrency contributes to money laundering and terrorist financing will hardly be true.
Meanwhile, banks continue to prosecute criminal organizations. From the US to Australia, commercial banks pay heavy fines for laundering dirty money to gangs such as the mafia and violent drug cartels. However, the most transparent and unreliable system is treated like a villain. But will the situation change soon?
Australian banks have been accused of discrimination
In Australia, it appears that a currency exchange operator is determined to condemn the banks’ alleged discriminatory banking practices against the country’s cryptocurrency exchange. As Cointelegraph previously reported, Bitcoin exchange owner Alan Flynn filed a petition with the ACT Civil and Administrative Court regarding alleged discriminatory practices by the Australian and New Zealand Banking Group and two Westpac commercial banks.
The owner of the exchange, which serves more than 450 customers, said that the company had suddenly closed accounts in 20 banks in the last three years. Flynn said both banks closed his accounts without notice.
Flynn filed a similar lawsuit against banks in 2020, but the Australian Financial Complaints Authority ruled that Westpac acted in accordance with the bank’s policy. Flynn said Westpac offered $ 250 compensation that has not yet been paid.
Cointelegraph also reached out to a wide range of stakeholders in the Australian cryptocurrency scene, and participants agreed that the banks involved were “standard denials of service”. Commenting on whether Australian banks could be called a “cryptocurrency phobia”, Steve Wallace, CEO of the Industry Association Blockchain Australia told Cointelegraph:
“It is fair to say that the banking industry in Australia has not reached the cryptocurrency sector. […] The historical history of cryptocurrencies and the dark web has resulted in a lack of investment from Australian banks in this sector. It also means that those who seek to attract banks do not have You receive almost no benefits. ”
In an interview with Cointelegraph, Michael Basina, a partner in commercial law firm Piper Alderman and a consultant for major Australian cryptocurrency exchanges, described Australian banks as conservative in nature and thus struggling with innovation related to cryptocurrencies. “As a relatively new industry, it is understood that banks do not have large amounts of data to identify problematic transactions, and they appear to be very cautious,” Bachinah said, adding:
“As banks have a privileged position in society and have the ability to close businesses effectively by disrupting banking, I hope it becomes more complicated and that bank termination is reserved for matters of real interest.”
According to Wallace, Blockchain Australia will continue to contact the banking sector and financial regulators such as the Australian Securities and Investment Authority and the Australian Hedge Authority. “There has been a marked increase in discussion of this issue in ASIC, APRA and the Reserve Bank of Australia as understanding in the government grows,” Wallace said, adding: “We hope the banking sector will gain confidence in the federal government. leadership in implementing measures in this sector. ”
We are not talking about encryption
In May 2020, JP Morgan hosted its first cryptocurrency exchange client for Coinbase and Gemini. The measure was taken after investigation due to the huge regulatory moat around US banks in terms of adapting start-ups.