Coinbase Calls Out Australian Banks Over “Systemic” Crypto Debanking

Crypto exchange Coinbase has accused Australia’s major banks of systematically cutting off services to crypto and fintech firms, stating debanking has shifted from a rare event to “a systemic feature of the Australian financial landscape” and now threatens competition.

In a submission to a federal inquiry into digital wallets and payments innovation, the Nasdaq-listed exchange said legitimate digital asset and fintech businesses face account closures, refusals of business banking and restrictions on transfers used to buy crypto, AFR reported.

It argued that large banks, focused on anti-money laundering (AML) rules and scam prevention, have made debanking “standard protocol” for companies using blockchain and digital assets. However, Coinbase, which will need an Australian financial services licence and will come under expanded AML rules from March 31, did not disclose its local user base, confirm whether it had been debanked, or provide specific examples.

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This comes a few weeks after Coinbase’s CEO Brian Armstrong claimed that many high executives at important banks and financial institutions are actively looking for ways to get involved in crypto.

Widespread Debanking in Australia

A 2021 Senate inquiry previously found widespread debanking across the fintech sector and recommended measures to prevent banks from denying services to compliant firms. 

Coinbase said those recommendations were agreed in principle but never implemented. It criticised what it sees as a risk-averse stance from major banks that “erodes trust in the Australian economy” and may push activity into less transparent channels.

Banks reject the idea that the practice is arbitrary, and it’s mostly due to the vast amount of crypto-money lost to scams and hacks. Figures cited by AFR mention that Aussies lost at least AU$330 million to crypto scams in the year to December 31, and the Australian Banking Association (ABA) notes that institutions face heavy penalties for AML and counter-terrorism financing breaches. 

ABA’s chief executive, Simon Birmingham, said banks must act where significant risk is identified and argued that if crypto platforms are struggling to meet the same standards as other financial institutions, they should improve their own controls rather than ask for lower thresholds.

Entrepreneur and long-time crypto investor Fred Schebesta described debanking as “real and widespread,” saying many compliant businesses have been affected. He pointed to retail caps on transfers to exchanges and instances where customers were asked to sell crypto at a loss to prove they were not being scammed. 

At a minimum, banks should establish dedicated teams and clear escalation pathways for crypto-related accounts, effectively a process of ‘rebanking’ so decisions are transparent, evidence-based, and subject to review rather than silent refusal.

Fred Schebesta, crypto entrepreneur and investor.

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