Australian banks close 13 bitcoin firms' accounts

In the wake of stringent norms on money laundering and terrorism finance, major Australian banks are closing down the accounts of bitcoin companies.

So far, the accounts of 13 digital currency providers have been closed down as Australian banks adhering to the more pressure on stricter norms on money laundering and terrorism finance.

Not only in Australia, but banks across the world prefer to withdraw from segments that have more compliance issues and close down the accounts of digital money companies. Of late, banks are feeling the increased pressure from the regulators on anti-money laundering. Australia accounts for seven percent of the world's circulation of bitcoins worth $5billion. 

Four major banks in Australia have shut down the accounts of 13 digital currency firms that deal in bitcoins. The four banks including Westpac Banking Corp withdrew from operations of remittances just to do away with a compliance headache. 

Australian banks have already shot off letters to 17 bitcoin firms such as BitTrade and Buyabitcoin. Banks in their letters informed bitcoin companies that their accounts would be closed down, according to Australian Digital Currency Commerce Association (ADCCA), which has been working on finding out a solution to the latest crisis for bitcoin companies.

Australian banks feel that the present operating model dealing with bitcoin currency is involved in very risky proposition as they need to meet the complicated compliance norms. Banks need to give assurance on their standards required for under anti-money laundering regulations. 

Ron Tucker, Chairman, The Australian Digital Currency Commerce Association, said banks were closing down the accounts without citing any reason for their decision. Banks didn't give any appointment to bitcoin firms and the trade body. 

The Commonwealth Bank of Australia (CBA) is working with global banking majors on how to make a safer way of transfer of money and replace the existing complicated international money transfer system. CBA is exploring ways to check the malpractices of criminals and hackers, who use technology behind digital currencies.

Banks opine that the current bitcoin operating model needs tough compliance and assurance from banks, which need to maintain high standards under anti-money laundering norms. Banks are keenly watching the latest developments in bitcoin and related government norms.

However, Commonwealth Bank of Australia, National Australia Bank and Australia & New Zealand Banking Group didn't comment on the issue. Responding to the situation, Australian government said that digital currencies should be regulated in a more stringent way. 

Digital currency is treated as money and tax structure needs to be simplified for customers who trade with digital money. Marking a first deal by any Australian bank in unregulated virtual money, Westpac recently invested in the US bitcoin startup Coinbase,