Australia’s Bendigo Bank blocks high-risk payments to crypto exchanges

Australia’s Bendigo Bank has become the fourth major bank in the country to announce blocks for “high-risk crypto payments,” citing the need to protect customers from investment scams.

The bank said on July 31 it implemented new rules on instant payments to crypto exchanges which adds “some friction to certain genuine payments,” explained its head of fraud Jason Gordon.

It cited combatting fraudulent payments and enhancing protections for its 2.3 million customers as reasons for the blocks.

A Bendigo Bank spokesperson told Cointelegraph that certain instant crypto transactions that it identifies as higher risk will be blocked, but the bank is not disclosing further details at this time.

The spokesperson said it identifies high-risk transactions by employing “a combination of factors” but refused to comment on specifics. The bank said it was not disclosing what exchanges may be affected by its changes.

Bendigo Bank’s blocks follow similar actions in recent months from three of Australia’s Big Four banks — Commonwealth Bank, National Australia Bank (NAB) and Westpac.

In an interview conducted before the recent Bendigo Bank announcement, Chainalysis’ APAC Policy Head Chengyi Ong warned that such actions will force Australia’s crypto public to interact with offshore exchanges.

Speaking to Cointelegraph, Ong argued that such blocks won’t stop criminal actors from using other platforms, crypto or not, while uncertainty over banking access could also drive crypto exchanges and users outside the jurisdiction of authorities.

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Instead of cutting off exchanges, Ong says banks — alongside regulators, telecommunication providers and social media platforms — need to cooperate at every point of the scam lifecycle.

“[We need to target] all the potential attack vectors and all the potential points of interaction between a victim and a scammer. We have to tackle every single one of those touchpoints.”

Dr. Aaron Lane, Senior Lecturer with the RMIT Blockchain Innovation Hub told Cointelegraph the “best thing” banks can do for consumer protection is to constructively work with exchanges, adding:

“Debanking as a risk tool should be reserved for individual cases of serious and unacceptable risk, not a general posture towards an entire industry or asset class.”

Australia has been weighing…