Effective immediately, HSBC will restrict all payments to cryptocurrency exchanges when deemed necessary. Specifically, from July 24, 2024, HSBC will block payments from bank accounts and credit cards that they reasonably believe are intended for cryptocurrency exchanges, citing customer protection as the reason.
In an email sent to customers on the same day the changes took effect, HSBC stated that those wishing to transfer money to cryptocurrency exchanges would need to find alternative methods. Other major banks like CBA, NAB, Westpac, and ANZ have also imposed some limitations on their customers’ cryptocurrency activities.
HSBC’s statement further elaborated that the bank will now automatically decline all transactions to cryptocurrency exchanges. The bank has not responded to an inquiry from Crypto News Australia for additional information.
Reasons for the Changes
HSBC attributed the changes to a rise in scams, referencing data from the Australian Competition and Consumer Commission (ACCC) which indicates that investment scams, particularly those involving cryptocurrency, account for the highest scam losses in Australia, totaling $171 million. However, an April 2024 report from the ACCC noted that Australians lost $2.7 billion to scams overall, with the $171 million linked to cryptocurrency being a smaller portion of the total losses, which have decreased by 13% from the previous report.
Crypto News Australia highlighted a University of Queensland report that emphasised the importance of education in preventing crypto scams, suggesting that education rather than outright bans might be a more effective approach.
The timing of these restrictions is unusual, given the increasing global adoption of cryptocurrency and institutions investing more in crypto-related funds. As options for Australians to transfer money to crypto exchanges become more limited, ING and St.George Bank remain among the few crypto-friendly alternatives for now
It is important for customers to be aware of the evolving regulatory landscape in the crypto industry. These restrictions imposed by HSBC and other major banks highlight the need for education and awareness to combat scams and fraudulent activities in the crypto space. While HSBC cites customer protection as the main reason for the payment restrictions, it is crucial for individuals to stay informed and seek reputable sources of information when engaging with cryptocurrency exchanges.
