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Three crypto businesses discussed their de-banking experiences in Australia during a panel discussion as part of the Senate enquiry into “Australia as a Technology and Financial Centre.”
A Senate enquiry has heard testimony from crypto-related companies and figures concerning being de-banked by Australian financial institutions.
On September 8, crypto investment business Aus Merchant, global remittance service Nium, and local peer-to-peer crypto trading platform Bitcoin Babe appeared on a panel as part of the Senate enquiry into “Australia as a Technology and Financial Centre.”
All three are registered with the financial intelligence authority AUSTRAC and are subject to reporting obligations, but they all had similar feelings of being de-banked without providing a solid reason.
Michaela Juric, the founder of the peer-to-peer trading business called “Bitcoin Babe” after her nickname, revealed that she has been banned by 91 banks and financial institutions throughout her seven-year tenure in crypto:
“As of yesterday, I have been banned and de-banked from 91 banks and financial institutions. That’s 91-lifetime bans. No reasons given, no case-by-case assessments or discussions engaged and no recourse available.”
At today’s Senate hearings on crypto regulation, the session opens with @ausfintech providing testimony on #debanking: CEO says there is no area within fintech suffering more from this than the crypto sector, saying “Australia will be left behind”
— chloe white (@ChloeWhiteAus) September 7, 2021
Bitcoin Babe conducts trades in Australia using exchanges such as Local Bitcoins, and according to her profile on the platform, she has completed over 40,000 trades with a feedback score of 98 percent since 2014.
Despite having an excellent online record, Juric informed crypto-friendly Liberal Senator Andrew Bragg that some institutions had labelled her as a terrorist because of the nature of her business:
“I’ve had banks go as far as report me as being like a terrorist on some databases, and that’s what stopped me from being able to get some of these services.”
On the final day of #crypto hearings we commenced with @ausfintech – they set out a plan for tax reform of capital gains tax on digital assets & detailed options to address de-banking which the Committee will consider carefully.
— Senator Andrew Bragg (@ajamesbragg) September 8, 2021
Nium, based in Singapore, is licenced in 40 markets across the world; yet, the company claims that Australia is the only area where it has experienced concerns with financial service providers.
Nium’s Asia-Pacific head of consumer business, Michael Minassian, indicated that the company believes there are some “uncompetitive practises” being conducted with de-banking, and he questioned the “opaque” justifications that banks have presented when discontinuing services to the company:
“They’re very vague as to why they are ceasing to provide banking services to you. I’ve had some bankers provide me with verbal reasons as the policy shifts within the bank etc, but essentially industries like remittance become too hard for the banks.”
“It’s costly for them to try and establish frameworks that they can allow banking, so it’s just easier for them to to to cease providing services,” he added.
Mitchell Travers —the co-founder of New South Wales-based crypto investment platform Aus Merchant — stated that with what little reasoning was provided behind debanking the platform, it was due to “risk avoidance” from banks.
“As far as I’m aware, It was a risk avoidance, risk-off attitude where the reasoning was that we were outside of the scope of services for these banks, and we weren’t given an opportunity to provide enhanced due diligence procedures,” he said.
Senator Bragg responded by stating “okay, I see your registration with AUSTRAC is worthless to a bank, it sounds like.”
The Commonwealth Bank (CBA) provided a submission to the inquiry explaining its practices and stated that it operates “commensurate systems and controls to mitigate and manage” anti-money laundering and terror financing risk.
“Where a customer’s source of funds and source of wealth cannot be determined, or their account activity is inconsistent with known business activities, the group takes appropriate efforts to minimise and manage its ML/TF risk,” the CBA stated in its submission.