NAB fraud chief Chris Sheehan says bank will block payments to high-risk cryptocurrency exchanges as pressure mounts on Binance

[ad_1]

The Australian Financial Review previously reported that Westpac and Commonwealth Bank had begun blocking payments to Binance, and ANZ said late last month that it would begin blocking payments to cryptocurrency platforms. high risk. These changes will limit the ability of exchanges to deposit and withdraw fiat currency from local banks.

Binance also lost its local banking partner Cuscal, which facilitates payments via PayID and other methods, and the Australian Securities and Investments Commission withdrew its local derivatives license.

The increased focus on the exchange follows a US Securities and Exchange Commission lawsuit that alleges that Binance and its chief executive Changpeng Zhao, one of the most prominent figures in the cryptocurrency world , deliberately evaded the laws and organized an illegal exchange.

In November, Mr. Zhaos’ rivalry with disgraced FTX founder Sam Bankman-Fried came to a head when Mr. Zhao questioned the stability of FTX, helping fuel a selloff in the company’s tokens. This set off a series of events that led to the collapse of FTX and criminal charges against Mr. Bankman-Fried. Since the collapse of FTX, the crypto industry has faced increasing regulatory pressure.

Banks face heat over customer protection

During a parliamentary hearing last week, CBA chief executive Matt Comyn said that 50% of the scams his bank had recently identified were related to cryptocurrency. The Australian Competition and Consumer Commission also found that people lost $221.3 million to crypto-related scams last year.

The crypto crackdown comes as banks face increasing pressure to do more to protect customers. NABs Mr Sheehan said bank scam alerts had helped consumers save $270 million by introducing payment prompts and engaging with telecoms carriers to stop text spoofing.

Yet the House of Representatives Economics Committee has been pushing for big banks to adopt a system that would force them to refund defrauded customers unless the customer is negligent, similar to an incoming measure in the UK.

All were resistant to the idea that NAB chief executive Ross McEwan said it would create a honeypot effect for scammers, and ANZ Shayne Elliott said scams had increased in the UK at a faster pace than in Australia and that such a measure could even reduce consumer awareness of scams.

Mr Sheehan said such regulation was short-sighted and created moral hazard.

There is a risk of creating an environment … where one party in the relationship has all the responsibility and all the accountability, and the other party can make any decision without any risk, he said. told the Financial Review. So how would this influence the other side of the equation, decision-making, diligence and prudence?

We want to prevent these things from happening in the first place. This is going to require a partnership between the banks, the telecom operators, the online platform and, honestly, the customers and the government.

If the argument is just to make the banks pay, that doesn’t stop the underlying crime or our communities in the long run, because the money is still going to activities that harm our society.

[ad_2]