Bitcoin Ban by Banks to be investigated by ACCC

Rod Sims, chairman of ACCC, is considering to investigate the anti-competitive behaviour which is shown by most major banks of Australia when it comes to bitcoin companies, the Australia Financial Review reports.

Rod Sims, the chairman of the Australia Competition and Consumer Commission, is considering initiating an investigation into the matter of Australia banks taking the action of shutting down accounts of local bitcoin operators. Sims is pondering over the decision after being contacted by Matthew Canavan, a Queensland Nationals Senator.

bannedSenator Matthey Canavan was a part of the Senate Committee that recently looked into bitcoin and other such cryptographic currencies. He sent a letter to ACCC chairman Rod Sims after a report in the Australian Financial Review revealed that many Australian Banks were shutting down the accounts of local bitcoin operators without any formal explanation.

The senator urged Sims to investigate whether the banks are involved in anti-competitive behaviour by their action of shutting down the accounts of bitcoin operators. In the letter, Senator Canavan justified his plea to the ACCC chairman by saying that the action taken by banks directly hinders the growth of alternate currencies by cutting off their financial roots. This effectively closes the competition between the two services and could affect customers as they are deprived of a service that could be beneficial for them.

Senator said:

The actions by the banks would appear to directly engage competition in the financial services industry as it stands now – and, by effectively nipping in the bud the growth of potential competitors, is likely to substantially reduce the potential for future competition to the detriment of consumers in the future.

Australian Digital Currency Commerce Association’s chairman Ron Tucker told The Financial Review that the banks were giving companies like his Bit Trade, no explanation at all as to why their accounts were being shut down all of a sudden.

Another bitcoin exchange founder claimed that his company had been trying to get an answer from their bank following their account being shut down, but their pleas have gone unanswered so far.

Rod Sims said that in the light of these events he is considering investigating the matter. If indeed what has been claimed in the reports is true, then it is more than enough evidence to start an investigation. He said other reasons like the refusal of supplying services or products without clear justification and misuse of market power warranted an investigation into banks’ actions on their own.

Although Tony Pearson, the acting chief of the Australian Bankers’ Association, has said that banks can close accounts if full payment trails can’t be seen, under anti-money laundering and counter-terrorism financing laws, Senator Canavan insists that the ACCC should definitely investigate the matter to see if bitcoin companies were treated unfairly by Australian banks.

Senator Canavan said:

I would also ask that the issue of possible incompatibility of digital currency businesses with anti-money laundering/counter-terrorism funding laws, which have been raised as a possible reason for the banks refusal of service, be investigated.

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