HSBC Australia Blocks Crypto Transactions amid $171M Loss

HSBC's Australian branch has informed customers that it has begun blocking payments to cryptocurrency exchanges starting July 24. The bank cited scams as the reason for this action.

HSBC Blocks Crypto Payments

In a July 24 email to customers, HSBC Australia explained its “new safety measures.” The bank stated: “From 24 July 2024, HSBC will block payments from bank accounts and credit cards that we reasonably believe are being made to cryptocurrency exchanges, for your protection.” The email also advised customers to find alternative ways to make payments to these exchanges.

HSBC supported its decision by referencing data from Australia's competition and consumer regulator, which showed Australians lost up to $171 million in investment scams in 2023. The bank apologized for the inconvenience but emphasized that its priority is keeping customer money safe.

HSBC Australia halts crypto payments due to scam concerns!🇦🇺Customers can no longer make payments to crypto exchanges.Is this a sign of tighter regulations to come?

Bendigo Bank Blocks Crypto

Following HSBC's move, Bendigo Bank also decided to block payments to cryptocurrency exchanges. This bank similarly cited the need to protect customers from investment scams.

Amy-Rose Goodey, Managing Director of the Digital Economy Council of Australia (DECA), stated that DECA was not informed in advance of HSBC's decision. She told Cointelegraph that HSBC's decision highlights the ongoing challenges between Australian banks and the cryptocurrency sector.

Goodey described the move as part of a “concerning trend” of restrictions that affect the digital currency community.

Goodey emphasized the need for dialogue and improved regulatory frameworks that balance innovation and risk management. She warned that without dialogue, more Australians could lose their “financial right” to participate in the digital economy.

Goodey also mentioned that establishing “clear, fair, and forward-thinking regulations” would help banks and industry players combat scams without hindering innovation. She noted that DECA has made progress since 2023, including being added to the advisory board of the National Anti-Scam Center.

HSBC clarified that it would still accept customer payments coming from cryptocurrency exchanges and that other banking services would continue as usual. HSBC Australia currently serves 1.5 million customers through 45 branches across the country.