Commonwealth Bank Halts Payments to Crypto Exchanges

June 08, 2023

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Australia’s largest bank Commonwealth Bank (CBA) announced that it would be declining or holding for 24 hours certain payments to crypto exchanges. The bank said its decision responds to growing worries about scams and other illicit activity involving crypto.

Meanwhile, the announcement comes only a few weeks after Australia’s oldest bank Westpac imposed restrictions on customers transacting with the crypto exchange Binance as part of its strategy to crack down on scammers.

Increased Activities of Fraud

While commenting on the update, James Roberts, Commonwealth Bank’s General Manager of Group Fraud Management Services, made an important observation regarding the increased consumer interest in crypto.

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He highlights the unfortunate reality that scammers worldwide are taking advantage of this trend by posing as legitimate investment opportunities or manipulating funds through crypto exchanges.

Furthermore, Roberts highlighted that the decline or 24-hour holds on certain crypto payments aim to reduce both the frequency of scams and the amount of money lost by customers.

Fraud Mitigating Measures

As part of its mitigating measures against fraudulent activities, CBA has implemented new measures to protect customers from scam risks related to crypto exchange payments.

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In the coming months, CBA intends to impose a $10,000 monthly cap on customer payments made expressly to exchanges to purchase crypto. By setting a cap on monthly exchange payments, CBA intends to provide additional protection to its customers.

Furthermore, the bank also made another significant announcement regarding its NameCheck anti-fraud technology, well-known for its ability to detect suspected fraudulent actions. By increasing access to this technology, the bank is helping to combat scams and frauds in general, not just in the crypto space.

Change in Direction

The decision by CBA to decline or temporarily hold certain payments to crypto exchanges represents a significant change in direction. It is notable considering the bank’s previous plans, announced in 2021, to launch crypto trading services for millions of its app users.

Matt Comyn, the bank’s CEO, previously stated that while there are risks to investing in the crypto business, there are far greater hazards to not participating. However, as recently as May 2022, CBA faced regulatory challenges in launching its crypto-trading product.

Ultimately, the country’s financial regulators prevailed, leading to the suspension of the planned pilot for the product.