Crypto-related companies and numbers have provided evidence in a Senate investigation that Australian financial institutions have scrapped banking.
The crypto investment firm Aus Merchant, the global remittance provider Nium and the small peer-to-peer crypto brokerage platform Bitcoin Babe spoke on September 8 as part of the Senate investigation into “Australia as a technology and financial center”.
All three are registered with the regulatory authority for financial information AUSTRAC and are subject to reporting requirements, but they all reflect similar feelings of unbanking without a specific explanation being available.
Michaela Juric, the founder of the peer-to-peer trading business named after her nickname “Bitcoin Babe”, stated that she has been banned from a total of 91 banks and financial institutions in her seven-year history in the crypto space:
“Since yesterday, 91 banks and financial institutions have blocked and released me. That’s 91 lifelong bans. No reason given, no case-by-case reviews or discussions and no legal recourse. “
At today’s Senate hearings on crypto regulation, the session begins with @ausfintech Give testimony about #debanking: CEO Says There Is No Area Within Fintech Suffering More Than The Crypto Sector Says “Australia Will Be Left Behind”
– chloe white (@ChloeWhiteAus) September 7, 2021
Bitcoin Babe uses exchanges like Local Bitcoins to conduct trades in Australia and according to her profile on the website, she has completed more than 40,000 trades since 2014 with a feedback of 98%.
Despite having a good reputation online, Juric told crypto-friendly Liberal Senator Andrew Bragg that some banks have even labeled her a terrorist because of the nature of their business:
“I have had banks report myself as a terrorist in some databases and that has prevented me from using some of these services.”
It is unsettling to hear about the personal impact of de-banking on people trying to start a small business. Banks have said that the driver of de-banking is the lack of a regulatory framework for digital assets. We have to fix that and we will keep the banks from doing so.
– Senator Andrew Bragg (@ajamesbragg) September 8, 2021
Singapore-based Nium is licensed in 40 markets around the world. However, the company stated that Australia is the only country where it has had problems with financial services providers.
Michael Minassian, Nium’s Asia Pacific head of consumer affairs, said the company believes there are some “anti-competitive practices” in de-banking when he questioned the “opaque” reasons the banks said the reduction of services offered to the company:
“They are very vague as to why they are no longer offering you banking services. Some bankers have given me verbal reasons as policy changes inside the bank etc, but essentially industries like remittances are getting too difficult for the banks.
“It is costly for them to try to create a framework that allows them to do banking so that it is easier for them to stop providing services,” he added.
Mitchell Travers – the co-founder of New South Wales-based crypto investment platform Aus Merchant – stated that with the few arguments in favor of debanking the platform, this was due to “risk avoidance” by banks.
“As far as I was aware, it was a risk-avoidant, risk-free attitude, the rationale being that we were out of scope for these banks and that we were not given an opportunity to offer advanced due diligence,” he said said.
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Senator Bragg responded by saying, “Okay, I see that your registration with AUSTRAC is worthless to a bank as it sounds.”
The Commonwealth Bank (CBA) submitted a motion to the investigation explaining its practices and stating that it had “adequate systems and controls in place to mitigate and manage” the anti-money laundering and terrorist financing risk.
“In cases where a client’s source of money and wealth cannot be determined or their account activities are inconsistent with known business activities, the Group will take appropriate steps to mitigate and manage their GW / TF risk,” The CBA said in his submission.