National Australia Bank Shuns Bitcoin Vendors, Finds Cryptocurrencies 'Risky'
By Reissa Su | April 11, 2014 6:47 PM EST
The National Australia Bank (NAB) is turning its back on Bitcoin vendors and digital currencies in general because they were "too risky." The Australian bank has sent letters to its business customers who were known to trade in Bitcoin and other cryptocurrencies. Customers involved in Bitcoin trading were informed that their accounts will be closed on May 2.
Some of Bitcoin enthusiast Mike Caldwell's coins are pictured at his office in Sandy, Utah, September 17, 2013.REUTERS/Jim Urquhart
According to the letter, NAB has conducted an internal review and concluded that Bitcoin vendors present an "unacceptable level of risk" to the bank's business and reputation. NAB provides banking services to companies that engage in Bitcoin trade.
A spokesman for the Australian bank has confirmed the move and said NAB reviews its risk profile regularly and the type of businesses it provides services. These reviews ensure that the bank's activities serve the best interests of customers and shareholders.
The NAB's decision follows the Bank of Montreal and Bank of Ireland's announcement to separate themselves from business customers involved in Bitcoin trading.
CoinJar, one of the Australia's biggest Bitcoin trader, uses the NAB's banking services to take payments from their clients. According to CoinJar's blogpost, it expressed its disappointment about NAB's decision which will also have a major impact to other companies.
Krypto Currency Solutions chief executive of digital currency trader Robert Masters said Australian banks were generally not comfortable with digital currencies and they tend to suspend banking services.
Bitcoin expert and University of Western Australia's director of software practice Professor David Glance said the NAB's decision was an "overreaction" and said that the bank had no evidence of companies doing something in particular.
Professor Glance said local digital currency providers were smaller than Mt Gox. They should not be compared to massive Bitcoin exchanges since local traders pose less risk.
Bitcoin trading has expanded to thanks to Robocoin, the company behind Bitcoin ATMs. The company is expected to provide more machines in 10 more locations around the world. The company has previously announced it will be shipping its Bitcoin ATMs to Boston and Seattle in the United States. More machines are heading to the UK, Australia, Italy, Ireland, Israel, Czech Republic, Japan and Singapore.
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