Precedent Set? ANZ Settles Debanking Case Brought by Bitcoin Trader

October 19, 2021, 9:30 AM AEST - 3 months ago

Allan Flynn, crypto trader and owner of Australian local exchange BitcoinCanberra, has settled his first complaint with the ANZ bank after being debanked because of his occupation as a digital currency exchange (DCE).

The bitcoiner announced the settlement in a Tweet late last week:

Flynn had lodged a claim against two of Australia’s biggest banks 20 months earlier after both had debanked him. The claim with ANZ has been settled but another continues with Westpac, to be heard later this week.

Understanding Debanking

‘Debanking’ is a recently coined term that refers to the process in which financial institutions, such as retail banks, cease delivering services to customers for whatever reason. Flynn was debanked by ANZ and Westpac based on his occupation as a crypto trader and for offering trading services to clients. Flynn alleged his human rights had been discriminated against because he ran a crypto operation.

ANZ released a statement in which it said:

ANZ acknowledges that it closed Mr Flynn’s accounts because it detected he was operating a DCE (digital currency exchange), and without seeking information from Mr Flynn about the particular circumstances of his DCE business, including the ML/TF (money laundering/terrorism financing) risks and policies of that business.

ANZ statement

At the moment, ANZ and other major financial institutions in Australia refuse to bank with operators of DCEs due to concerns of non-compliance with money laundering and terrorism financing risks.

Aussie Businesses Being Debanked

Flynn’s case is no longer unique, and people are starting to wonder about the motives behind debanking. Last month, Fintech Australia CEO Rebecca Schot-Guppy and 150 members of her organisation had been debanked with no apparent cause or means to appeal.

Michaela Juric, founder of Bitcoin Babe, has said that her banking services had been terminated 91 times since establishing her crypto brokerage firm seven years ago. Juric stated that some of her family members had also been affected, making it difficult for them to access utilities such as electricity, internet, water and insurance.

Local Australian brokerage Aus Merchant has been debanked four times in the past year. Managing director Mitchell Travers has concluded that anti-competitive practices might have been the true motive behind these decisions.

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