Banks Clamp Down: Crypto Firms Fight for Financial Freedom

Australians continue to encounter significant banking barriers when engaging in cryptocurrency transactions, despite years of regulatory progress in the sector, according to recent surveys and industry insights. A Binance survey of 1,900 Australians revealed that 58% of respondents desire seamless and limit-free access to fund deposits on exchanges, while 22% reported switching banks to facilitate easier crypto purchases. Industry leaders attribute these issues to inconsistent access to financial services, which hampers market participation and trust [1].

Crypto businesses and users frequently face restrictions imposed by traditional banks. OKX Australia’s CEO, Kate Cooper, highlighted that many financial institutions deny services to crypto-related businesses or restrict transfers to exchanges. For example, Commonwealth Bank, one of Australia’s largest banks, has imposed a cap of 10,000 Australian dollars ($6,527) per month for customers transferring funds to crypto platforms. Cooper noted that while adoption rates in Australia exceed 30%, the friction caused by these banking restrictions generates considerable frustration among users [1].

A more alarming issue is the practice of debanking, wherein individuals and businesses lose access to banking services due to their involvement in the crypto ecosystem. Jonathon Miller, General Manager of Kraken Australia, stated that numerous clients and employees have had their accounts closed or access revoked. This has led to concentration risks, as many local exchanges and startups are restricted to a small group of banks willing to support their operations. Miller emphasized that such practices contradict the very principles of financial independence that underpin the crypto movement [1].

Binance has also encountered challenges in the Australian market, with users able to trade crypto using credit or debit cards but unable to deposit or withdraw Australian dollars via bank transfers. Matt Poblocki, Binance’s General Manager for Australia and New Zealand, described this as a broader industry issue and not an isolated problem. The company has been working to develop alternative on-ramps and off-ramps while advocating for systemic change. Cooper similarly noted that debanking remains a significant hurdle, with banks often refusing services to legitimate crypto businesses [1].

Industry executives are increasingly calling for clearer legislation to address these challenges. Cooper pointed to a draft legislative framework being developed by the Australian government as a potential solution. The government, under the Labor Party, has proposed a regulatory framework targeting crypto exchanges and addressing issues such as debanking. The Treasury outlined four key priorities for its upcoming regulations, aiming to distinguish between responsible businesses and bad actors while providing banks with clearer guidance [1].

Regulatory clarity and collaboration between government, banks, and the crypto industry are seen as critical to resolving the current impasse. Poblocki stressed the importance of such collaboration in providing sustainable solutions to banking restrictions, while Miller called for a more nuanced approach to due diligence that accounts for the legitimacy of crypto businesses. Without these measures, the continued exclusion of crypto participants from traditional financial systems risks further fragmentation and offshore migration of activity [1].

Source: [1] Australians still feel bank 'friction' despite years of crypto ... (https://cointelegraph.com/news/crypto-exchange-users-australia-still-face-banking-barriers)