Digital currency exchange operator and a professional trader Allan Flynn has filed a complaint against two Australian banks claiming that their systemic discrimination caused damage to his business.
Mr. Flynn alleges that Westpac and ANZ subjected him to unlawful discrimination when the banks closed his accounts. The Australian Financial Review reported that bank account closures hound Flynn.
Banks, including CBA, NAB, ING, and Bendigo Bank, closed as many as 20 of his accounts over the past three years, prompting him to open new accounts with Westpac and ANZ.
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Flynn said that he informed the banks that he opened the accounts for his business to facilitate cryptocurrency trading, but they were closed almost immediately. He is now seeking 250,000 Australian dollars, or about $192,000, in compensation.
“Under investigation for cryptocurrency fraud”
As to why his two accounts with Westpac were closed, Flynn said that the bank informed him that he was under investigation for cryptocurrency fraud. Interestingly, his crypto exchange business, which serves around 450 clients, is registered with the Australian Transaction Reports and Analysis Center (AUSTRAC).
ANZ does not offer banking services to businesses involved in cryptocurrency. Still, Flynn claims that one of the bank’s employees informed financial institutions and his customers that he was involved in fraudulent activities. He also claims that the bank removed him as a signatory to a term deposit account held in his brother’s name that holds an inheritance from their parentsand closed the account.
“How am I supposed to run a lawful business if I can’t get a bank account?” Flynn said.
The gap between crypto exchanges and banking services
Flynn said that this is not an isolated case citing that other crypto traders also experienced having their bank accounts closed.
“I am by no means alone or the first. I know of at least one other trader who has had accounts closed more than 60 times,” Flynn said.
Despite the increasing popularity of Bitcoin (BTC) and other cryptocurrencies, a large gap remains between crypto exchange firms and banking institutions.
Amid the record-breaking price increase of BTC, crypto traders faced difficulty cashing in their profits because some banks do not accept transfers from digital currency exchange firms. HSBC, the world’s sixth-largest bank, recently blocked transfers from crypto exchanges.
In September 2020, massive advertising posters supporting Bitcoin had been plastered on a tram station located right in front of HSBC Hong Kong headquarters. Titled ‘Be your own bank,’ the ads encouraged people to ditch the traditional banking system instead of opting for Bitcoin.
