HSBC Australia Suspends Payments to Crypto Platforms Over Fraud Risks

cryptonews.com:

HSBC Australia recently told customers it will stop processing payments to crypto exchanges starting July 24. This decision is attributed to customer protection concerns, emails circulated on X showed.

However, the bank said it will continue allowing customers to receive funds from crypto exchanges into their accounts.

“If you wish to make payments to cryptocurrency exchanges, you’ll need to make alternative arrangements,” the email read. The bank did not provide details about which crypto exchanges would be affected under the restrictions.

The subsidiary did not return Cryptonews’ request for comment by press time.

HSBC Australia justified its decision with a reference to data from Australia’s competition and consumer regulator. It pointed out that Australians suffered up to $171m in losses due to crypto-related investment scams in 2023.

Further, the lender’s decision to block payments to crypto exchanges follows a similar move from Australia’s “Big Four” banks about a year ago. Commonwealth Bank, National Australia Bank, Westpac, and Australia and New Zealand Banking Group all cited concerns about scams and other risks associated with crypto trading as the primary reason for restricting access to these platforms.

Separately, Australia’s financial intelligence agency recently warned against escalating money laundering risks through crypto. Specifically, the agency identified high money laundering vulnerabilities associated with digital currencies used as payment. Looking ahead, it expects that these risks will continue to grow.

Additionally, both crypto exchanges and digital assets used as a store of value were categorized as having a medium-level money laundering risk, with expectations of an increase in risk over the next