Australia’s largest bank, Commonwealth Bank (CBA), said on Thursday that it would decline or temporarily block some payments to certain crypto exchanges to protect customers from scams. The move comes after the SEC filed a lawsuit against major global cryptocurrency exchanges Coinbase and Binance.
Moreover, CBA is following the footsteps of prominent Australian bank Westpac, which prohibited users from transacting with crypto exchange Binance last month.
According to a statement published by the CBA, it will decline or enforce a 24-hour hold on certain payments to cryptocurrency exchanges; the time period may vary.
Reporting from @jessicasier @FinancialReview that @CommBank have banned AUD transfers to “high-risk” crypto exchanges & limited transactions with others to $10k per month, with a 24 hr delay. $700k per day leaves CBA as scammed money heading to crypto. Banks & the crypto industry…
— Caroline Bowler (@CaroBowler) June 8, 2023
Meanwhile, the bank did not summarize which digital exchanges or payment types would be affected by the new measures.
The CBA stated:
“Commonwealth Bank has today introduced new measures to help protect customers from scam risks associated with making certain payments to cryptocurrency exchanges.”
In the statement, the bank also revealed its plans to introduce a monthly limit of 10,000 Australian dollars ($6,700) for customers sending funds to crypto exchanges to purchase crypto assets. The bank will implement this policy in the coming months.
“In coming months the Bank will also introduce $10,000 limits in a calendar month where the Bank can identify the customer payments are to exchanges for cryptocurrency purchases”.
Scammers globally are taking advantage of the booming interest in the crypto industry, said James Roberts, Commonwealth’s general manager of fraud management services.
Often, these scammers pose as legitimate investment opportunities or transfer funds to crypto exchanges in fraudulent schemes. The bank also said it would monitor the effects of measures to combat the situation.
SEC Sues Giant Crypto Exchanges
On June 5, the SEC sued Binance and its chief executive, Changpeng Zhao, accusing the company of artificially inflating trading volume on the site, evading US regulations, and mishandling user funds.
According to the financial regulator, the company offered unregistered securities to the customers in the form of Binance BUSD stablecoin and BNB tokens. In particular, the SEC filed 13 charges against Binance.
The financial regulator sued another crypto firm Coinbase on Tuesday, alleging that it violated US securities laws by failing to register as a broker, clearing agency, or exchange. Shares of Coinbase fell 17% after the news.
Coinbase said the rules were unclear, and the company wanted transparent rules and regulations for the business.