NAB severs ties with 'risky' Bitcoin vendors

NAB severs ties with 'risky' Bitcoin vendors

Summary: National Australia Bank will no longer be providing banking services to business customers who are trading with digital currencies, such as Bitcoin.

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TOPICS: Banking
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National Australia Bank (NAB) is severing ties to digital currencies, saying they're too risky.

NAB has sent letters to business customers who primarily trade in Bitcoin and similar cryptocurrencies, informing them that their accounts will be closed on May 2.

The letters say an internal review concluded that ties with digital currency providers pose an unacceptable level of risk to NAB's business and reputation.

NAB has never banked or traded in digital currencies, but has provided banking services to companies who do.

Confirming the move, a spokesman said: "NAB continually reviews its risk profile and the businesses we bank, ensuring NAB's activities are in the best interest of our customers and our shareholders."

The decision follows recent moves by the Bank of Ireland and the Bank of Montreal to distance themselves from customers who trade in digital currencies.

It also comes a month after Japanese bank Mizhuo was named in US and Canadian lawsuits brought against the bankrupt Mt Gox exchange, to whom it provided banking services.

Mt Gox, the world's biggest exchange, announced in February it had been robbed of all its Bitcoins in a massive cyber attack.

One of Australia's largest Bitcoin traders, CoinJar, which uses NAB to take deposits from clients, said in a blog post it was disappointed with the decision, adding it would affect many other companies.

But co-founder Asher Tan praised the bank for providing notice, saying CoinJar had been dumped by the Commonwealth Bank last year in a much shorter timeframe.

Australian banks are generally uneasy with digital currencies and regularly shut off banking services, said Robert Masters, CEO of digital currency trader Krypto Currency Solutions.

Professor David Glance, a bitcoin expert and the director of software practice at the University of Western Australia, said NAB's move smacked of an overreaction.

"Unless they had evidence that the companies they were dealing with were actually doing something in particular, it's an odd reaction."

He said local Australian digital currency providers were far smaller than massive exchanges such as Mt. Gox and therefore posed far less risk.

Topic: Banking

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5 comments
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  • Only 2 things needed

    Again Australia will try the tired, old "slow follower" routine while the innovations of the future pass it by. In Korea the biggest bank funded the major Bitcoin startups. I guess Australians will just pay the Koreans to control the future of money. Hey, it worked for cars, TVs, & computers, didn't it? Tony, Malcolm, and Joe can just buy every high schooler a surfboard and a shovel...that's all they'll ever need.
    OpenPodBayDoorsHAL
    • Bitcoin - from Hero to Zero in 30 days

      or so it would look to be headed....
      William.Farrel
  • Amazing

    I find it amazing how fast all the Bitcoin (Bitcon?) defenders who used to populate these forums have gone silent. Guess there's still a few holdouts who haven't got the memo yet. I'm certain we haven't heard the last of them though. When the Libertarians figure out what their next plan to inflate a bubble is, I'm sure they'll be back in force. Maybe they're all busy at the moment trying to exploit the Open SSL security hole.
    Sir Name
    • They'll be back

      Time will tell, however, how much the "irrational exuberance" has been dampened (coining that phrase might have been one of Alan Greenspan's greatest contributions to the public welfare).
      John L. Ries
  • That may be an overreaction

    I'd be wary about lending BTC traders money, but there isn't a lot of risk in giving one a checking account.
    John L. Ries