MyCryptoWallet, an Australian Bitcoin exchange, is the latest in the long line of crypto exchanges to have its bank account frozen, meaning customers cannot withdraw funds from the platform. Despite having operated since 2017, MyCryptoWallet contacted users on January 16 to inform them that they were undergoing maintenance, which would affect the withdrawal of funds. No further announcements were made until Monday, when they informed customers that National Australia Bank had closed their account with no notice and no attempt to justify or explain their actions.
@mycryptowallet customers, lodge your complaints with NAB asap pic.twitter.com/htviMREEm7
— Jen ?? (@cryptotwinsau) January 21, 2019
MyCryptoWallet has urged customers to contact the bank directly and has lodged a complaint with the Australian Financial Complaints Authority, stating that its chief concern is the protection of its users’ funds, which are now firmly out of their control and in the bank’s hands.
A Little Bit of History Repeating
MyCryptoWallet is far from the first cryptocurrency-related entity to suffer such a fate, with such occurrences happening more frequently as exposure to digital assets grows and old fears still permeate the financial markets. In October last year, Canadian exchange QuadrigaCX had their assets, valued at over $22 million at the time, seized by Canadian Imperial Bank of Commerce with no prior warning or explanation. Around the same time, Brazilian exchange Bitcoin Max had to go to court to get a similar decision overturned, with the court threatening fines if the banks didn’t cooperate. The debate is even hotter in Chile, where the Court of Defense of Free Competition has clashed with the supreme court over the closure and reopening of crypto exchanges’ bank accounts.
Illegal Profiling of Crypto Users
The practice of banks closing the accounts of both companies and individuals without notice or reason is worryingly common. It actually reinforces the core message behind cryptocurrency – that third parties shouldn’t be trusted with our money. When reasons are given by the banks they usually come in the form of vaguely worded and usually unfounded concerns regarding the source of the cryptocurrency. Some have likened this to anyone handling bank notes being associated with drug trafficking, given the amount of cocaine contamination present on them.
Until the industry becomes more legitimized and the narrative around them can be changed, banks will continue to have backward views, and those involved in cryptocurrency should, sadly, continue to expect such actions.
