HSBC Australia blocks payments to crypto exchanges amid rising scam concerns

HSBC Australia has announced that it will block customers from making payments to cryptocurrency exchanges from July 24 due to concerns over customer protection.

According to the post shared on X, the bank stated that there has been an increase in investment scams related to cryptocurrencies, and that Australians will suffer losses of up to $171 million in 2023.

The bank will continue to allow customers to receive money from crypto exchanges, despite banning payments to them. However, the bank did not provide further details on which crypto exchanges would be affected by the restrictions.

In an email to Reddit, HSBC advised customers affected by the new policy to seek alternative methods for making such payments.

“Due to the high-risk nature of these payments, you will not be able to make this payment using HSBC,” HSBC Australia said in an email.

HSBC Australia’s move coincides with Australia’s largest banks, Commonwealth Bank, National Australia Bank, Westpac and Australia and New Zealand Banking Group, restricting access to cryptocurrency platforms nearly a year ago, citing similar concerns about fraud and transaction risks.

Additionally, Australia’s financial crime watchdog, AUSTRAC, recently increased its warnings about the potential for money laundering via cryptocurrencies, noting specific vulnerabilities associated with digital currencies used for payments and predicting increased risks in this area.

This decision comes after Australia banned the use of cryptocurrencies for online gambling payments.

Additionally, regulators are intensifying their scrutiny of the cryptocurrency sector, with the Australian Taxation Office requesting personal information and transaction details from crypto investors and exchanges, while the Australian Securities and Investments Commission (ASIC) is targeting crypto entities it suspects of offering unregistered securities.