Banking giant HSBC is blocking all cryptocurrency exchanges in Australia. The bank reported a growing number of scams as the rationale behind the move.
As of July 24, the bank has started blocking all customer payments directed towards cryptocurrency exchanges. An announcement on HSBC’s website states:
We’ve made these changes to protect our customers in response to the increase in scams. We’re continually investing in our security capabilities and strengthening our systems to help protect our customers from evolving threats.
Protecting customers from scams
Customers on the social media platform Reddit claim the bank announced the move on very short notice. In a July 24 email, the bank labelled the block as “safety measures,” urging them to look for “alternative arrangements” if they were looking to transact with crypto exchanges.
Any transactions made towards cryptocurrency exchanges would be automatically blocked by the bank. This includes payments from credit and debit cards as well.
However, the bank will continue to allow payments from crypto exchanges.
The bank pointed to data claiming that Australians lost over $170 million to investment scams in 2023 alone. Meanwhile, Australia’s financial watchdog also recently released a report raising concerns over the use of cryptocurrencies in illicit activities.
The report highlighted traditional channels like cash and real estate as the leading facilitators of illicit activities in the nation. In comparison to the “medium” risk factor designated for cryptocurrencies, cash was given a “very high” risk status.
The banking giant is no stranger to restricting access to crypto assets. Last year, it made a similar move in the United Kingdom, preventing retail customers from buying cryptocurrencies using credit cards. Further, it issued a £5,000 limit on debit cards for crypto purchases.
The move was in response to a warning issued by the Financial Conduct Authority (FCA) about the risks associated with crypto assets.
Australia cracking down on crypto
HSBC follows in the footsteps of other major Australian banking giants that have shunned cryptocurrencies.
Last year, the top banks in the region — Commonwealth Bank, National Australia Bank, Westpac, and Australia and New Zealand Banking Group (ANZ)—collectively blocked crypto payments.
A report from Westpac at the time cited investment scams as the reason behind 50% of all customer losses linked to scams, with one-third of all scams involving transfers to cryptocurrency exchanges.
The restrictions on cryptocurrencies extend beyond crypto exchanges. Australian regulators have also cracked down on the use of cryptocurrencies as a payment method for online gambling.
Meanwhile, the Australian Securities & Investments Commission has also been targeting crypto entities it deems as unregistered securities.
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