What occurred in India’s cryptocurrency space a few years ago is now at risk of also occurring in Australia. The country’s financial laws have failed to keep up and include cryptocurrency, and thus many startup ventures delving in blockchain and in digital currencies are now at risk of losing the money and support they receive from standard banks.
Australia Is Having Trouble in Its Crypto Space
India saw a situation like this occurring just a few years ago. Many news outlets falsely reported that cryptocurrency activity was outlawed in the nation, though this wasn’t quite true. Rather, what happened was crypto businesses in India were not allowed to get support from banks. They could not utilize bank accounts or the tools or products these institutions offered, and many were forced to either shut down or move elsewhere.
In Australia, the same situation is occurring due to a lack of crypto regulation within the company’s borders. Many crypto entrepreneurs are now turning to banks to find the necessary funding for their businesses – only to be viciously turned away. Michael Juric is one such person. He has already been denied service from approximately 91 banks, and he doesn’t think things are going to get any better.
As the CEO of a crypto exchange, his business is registered with a firm known as AUSTRAC, which is the financial crimes monitoring network in Australia. He doesn’t feel this will be enough given how he’s been treated by so many banks. In a recent interview, he stated:
When I started my business in 2014, I originally opened a bank account with Commonwealth Bank. It was shut down around six months later, and since then, it’s been a domino effect of account closures.
According to Senator Andrew Bragg, the situation is not unique, and this is occurring throughout the digital space in Australia. Due to the lagging regulation in the country, many banks are using current loopholes to deny services to digital currency firms. Bragg commented:
There has been some very troubling behavior exhibited by banks, where there has been competition… Cryptocurrency is very popular, but it is not regulated, so at the moment people are purchasing cryptocurrency, but they’re doing that without any kind of consumer protection.
Being Registered Is Not Enough
Per data from AUSTRAC, there are currently about 400 separate digital currency exchanges stationed throughout the country of Australia. It is also estimated that about one in every six people in the nation own cryptocurrency. Overall, it is stated that individuals in Australia own as much as $8 billion in crypto between them.
Some firms are beginning to fight back in favor of crypto entrepreneurs. Fintech firm Finder, for example, has submitted a request with regulators that digital currency transactions occurring through accredited exchanges be insured in a manner similar with bank deposits.