Bitcoin companies receive major blow from big Australian banks

In response to tighter rules on money laundering and terrorism finance, major Australian banks are closing accounts of bitcoin companies, driving at least 13 cryptocurrency providers out of business, an industry body spokesman said on Tuesday, as reported by Reuters.

In December, Westpac Banking Corp pulled out of the remittances business in a bid to lessen compliance risks. Under pressure from regulators to abide by tougher anti-money laundering and counter-terrorism financing rules, banks world over are quitting sectors that present compliance issues.

"The current bitcoin operating model requires very tough compliance and assurance requirements to ensure we meet the high standards required under anti-money laundering regulations," a Westpac spokesman said. "We continue to monitor developments in bitcoin, including their regulation."

Ron Tucker, chairman of industry body The Australian Digital Currency Commerce Association (ADCCA), said banks were refusing to explain why accounts were being closed, or discuss what could be done to address the problem, as reported by The Australian Financial Review.

"Our members have been unable to obtain any formal clarification on the reasons for closure, except for references to policy or risk. Just what policies or risks these are have not been specified," he said. "The industry is more than happy to talk to the banks about their concerns. However, neither the association nor its members have been given the opportunity."