HSBC began blocking all crypto exchange payments on 24 July 2024 to combat scam losses.
The bank claims to protect customers, citing significant financial losses to scams in Australia.
HSBC has just announced sweeping changes, affecting anyone using the bank to engage with crypto services – and with very little notice.
From today HSBC will restrict all payments to cryptocurrency exchanges when deemed necessary:
From 24 July 2024, HSBC will block payments from bank accounts and credit cards that we reasonably believe are being made to cryptocurrency exchanges, for your protection.
HSBC
A statement emailed to customers on July 24 – the exact day the changes came into effect – said the move is intended to protect customers.
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The bank said anyone wanting to transfer money to an exchange would need to look for alternatives. The big four banks, CBA, NAB, Westpac and ANZ have all limited their customers’ interactions with crypto to some extent.
However, the announcement by HSBC says that the bank will “now automatically decline all transactions to cryptocurrency exchanges”. The bank has not responded to an information request by Crypto News Australia.
Why Were the Changes Made?
The bank explained the changes have been made because of an increase in scams. HSBC said that according to the Australian Competition and Consumer Commission (ACCC), investment scams have been responsible for the “most scam losses in Australia”, and that these are chiefly through crypto. The bank cites a total loss of $171 million.
However, as per an ACCC report from April 2024, Australians lost a total of $2.7 billion to scams – dwarfing the $171 million related to crypto. The report also reveals overall losses are down 13% from the previous report.
CNA reported yesterday that a University of Queensland report highlights the need for education to avoid crypto scams. This shows that education, rather than blanket bans, is an appropriate way to deal with scams.
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It seems odd that Australian banks would take this route now, especially at a time when adoption of crypto is increasing worldwide, with institutions putting more of their assets in crypto-related funds.
As Aussies’ options for transferring money to crypto exchanges become more limited, ING and St.George Bank remain crypto-friendly alternatives at present.
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