NAB bans crypto exchanges in scam crackdown

It comes after Westpac cut off transactions with the world’s biggest crypto exchange, Binance, and another big player, AFL sponsor Crypto.com, and the Commonwealth Bank moved to delay or deny crypto-related transfers.

NAB’s head of fraud investigations, former federal cop Chris Sheehan, declined to identify the crypto exchanges the bank is cutting off but said it was “making consistent decisions with the rest of the industry in terms of some of the more high profile or well known crypto exchanges”.

“I’m not going to give you a specific number. I just don’t want to risk giving crooks a playbook and for that reason, I’m not going to name names, but it’s several at the moment,” he said.

He said that additional exchanges could be blocked “as the crooks start changing their methodologies”.

NAB is also looking closely at the online gaming industry, particularly offshore casinos that illegally offer their services to Australians.

“We would look to adopt a similar approach if we see similar patterns developing,” Mr Sheehan said.

The bank’s crypto clampdown came after an earlier move to curb scams by asking customers if they really wanted to go ahead with a transaction that looked suspect resulted in about $270m worth of transfers being abandoned over 15 weeks.

Mr Sheehan said data from the Australian Financial Crimes Exchange, a group which collects and shares intelligence from the banking industry, showed that in April and May about half of fraud or scam-related payments were flowing into crypto exchanges.

“You can understand why because once money goes into crypto, it becomes quite anonymised and very, very easy to move around the world outside of the normal international payment system,” he said.

He said that when suspect payments were made to international banks, NAB was able to contact the bank overseas to try to recover the money but “once it goes into crypto, it could go anywhere in the world, and we’ve got no visibility of that”.

The crypto sector was in a red-hot boom until late last year, when collapses including the fall of FTX smashed the price of currencies including Bitcoin.

Since then, the industry has been rocked by law enforcement action, including the arrest by the FBI last week of Celsius founder Alex Mashinky on fraud charges, and a crackdown led by US regulators on companies including Binance and Coinbase.

Meanwhile, a boom in scams that saw Australians lose a record $3.1bn last year has prompted moves by banks and regulators that include NAB getting rid of links in SMS messages and the Albanese Government setting up a national anti-scam centre this month.

But consumer groups say banks should be doing more to prevent scams and have called on the sector to refund customers who fall victim to them.

Mr Sheehan said banks agreed with groups such as the Consumer Action Law Centre that customers should be protected from scams, but questioned whether the sector should be on the hook to reimburse people who went ahead with transactions despite being warned against them.

He said that if banks were responsible for reimbursing scam victims, they would have to intrude far more into the affairs of customers in order to find and stop dodgy digital transactions, which were about 10,800 of the 1bn NAB processed last year.

“To find those 10,800 events, we’ll have to intervene in far more legitimate payments, inconveniencing customers who aren’t caught up in any sort of fraud or scam event,” he said.

“We’re going to have to know a lot more about customers and we’re going to have to remove some of the customer’s autonomy to trade on their own account and use their own money in the ways that they want to use it.”