ACCC Investigates Australian Banks Closing Down Accounts Of Bitcoin Businesses
According to the recent bitcon news, reports that various major banks have over the recent past closed down accounts of bitcoin business has resulted in the ACCC (Australian Competition and Consumer Commission) launching an investigation into these institutions. Towards the end of October, the commission was already in the early stages of the investigation.
Bitcon news reports on the subject indicate that the ACCC wants to understand why the banks decided to close the bitcoin accounts. The government body is also curious as to whether the bitcon news indicated that there was collusion among the financial institutions.
In general, the regulator wants to know whether these actions by the banks can be described as non-competitive. The investigation was set in motion by Matthew Canavan, Queensland Nationals Senator.
The senator urged the body to open investigations following information that the banks involved had closed accounts for 17 bitcoin businesses. According to bitcon news sources, the businesses received letters telling them that their accounts were being shut down.
Among the businesses affected are Buyabitcoin and Bit Trader, both of which bitcoin exchanges. The closure of these business accounts would in turn weaken their operations and affect several other bitcoin users.
The senator’s concerns were also backed by Labor Senator, Sam Dastyari, who added that the banks were abusing their government protection by refusing to do business with bitcoin traders and operators.
The banks have an arrangement with the government guaranteeing them up to $750 billion on their deposits. But Mr Dastyari claims that this does not give them the right to stifle upcoming businesses just to maintain their status quo.
Generally, bitcon news sources see the banks’ actions as a “crackdown” on bitcoin operations. It is widely believed that the banks may have acted in contravention to competition laws by colluding to frustrate businesses linked to use of crypto-currencies.
Various bitcon news sources claim that when the banks closed the accounts for the more than a dozen bitcoin businesses, they offered no explanation as to why they decided to act as such. They also failed to explain what they were going to do to resolve the issue. This was confirmed by Ron Tucker, the chairman of the Australian Digital Currency Commerce Association.
Bitcoin is increasingly popular, and its uptake by various businesses and individuals certainly poses some competition to established financial institutions. These banks still have majority market share, their actions, if they were meant to beat competition, constitute misuse of power.
Bitcon news sources had earlier indicated that bitcoin traders were also getting across-the-board discrimination from the banking institutions. Some of the traders ended up with substantial financial losses, whether on personal or business accounts. Additionally, they were blacklisted by the institutions.
Ironically, even as the banks perpetuated an attack against bitcoin operators, the Australian Bankers Association, a body in which these banks are members, publicly claimed that its members were looking into how they can work with Bitcoin traders.
The president of Bitcoin Association of Australia claims that Tony Pearson, the chief executive of the Australian Bankers Association, reached out to him to explain that the banks were trying to find how they could cooperate with bitcoin traders.
Although not much of a threat at the moment, bitcoin and other crypto-currencies are certainly a threat to the traditional banking model. This is why the abrupt, and seemingly co-ordinated, and unexplained closure of accounts held by these bitcoin businesses is suspected to be an anti-competitive move.
At the moment, Australia is working on having bitcoin recognized as a currency, not property as is currently the case. In fact, this appears to be the trend around the world. Among the appeals of bitcoin is the fact that crypto-currency provides more cost-effective financial services for both individuals and businesses.
While the Australian Bankers Association seems keen to dispel fears that its members are trying to crackdown on bitcoin operations, the banks themselves seem to have a different opinion. For instance, according to various bitcon news reports, two of the nine major banks linked to the closure of the accounts, have refused to comment on the account closures, instead claiming that the currency’s lack of transparency and proper regulation attracts illegal financial operations such as money laundering.