Easy Crypto, a New Zealand-based cryptocurrency company, has accused major banks in the region of bullying as they implement stricter controls on crypto transactions and bank accounts. In response, the banks have defended their firm stance, citing the risks associated with cryptocurrencies and the need for a cautious approach in the current market. This article explores the ongoing debate between Easy Crypto and the New Zealand banking institutions, highlighting the different approaches taken by banks in regulating crypto transactions.
The Need for Strict Controls:
The New Zealand banks argue that a tough approach to cryptocurrency regulation is necessary due to the inherent risks associated with the global crypto market. With recent events such as the revocation of Binance Australia’s financial services license and discussions in Australia about banning deep fakes, the banks believe that maintaining a stringent regulatory environment is crucial. The collapse of FTX further underscores the need for increased vigilance in the industry.
Easy Crypto’s Concerns:
Easy Crypto’s co-founder and CEO, Janine Grainger, has expressed frustration over major banks frequently failing to process transactions for cryptocurrency companies and their refusal to open accounts for industry participants. Grainger has called on the government to intervene and ensure that law-abiding crypto users have access to financial services. She emphasizes the importance of banks embracing the advancements brought about by cryptocurrencies and avoiding restrictive policies that hinder market participation.
Diverse Approaches by Banks:
Different banks in New Zealand have adopted varying approaches to regulate crypto transactions. ASB prioritizes client security while navigating the complex regulatory environment, focusing on counter-terrorism financing, sanctions, and anti-money laundering regulations. Westpac New Zealand takes a cautious stance, categorizing the digital currency exchange industry as high-risk and refraining from providing banking services to its participants. ANZ maintains a conservative position but allows customers to engage in certain cryptocurrency transactions without commercial interests. BNZ follows regulatory advice, considering cryptocurrencies as high-risk and setting customer onboarding thresholds. Kiwi Bank and ASB Bank adopt a more open position, evaluating potential customers on a case-by-case basis, emphasizing compliance with anti-money laundering and counter-terrorism finance obligations.
Binance, a major cryptocurrency exchange, had significant aspirations for Australia and New Zealand. However, it has recently faced legal challenges in the United States. Ben Rose, the Regional General Manager of Binance in the two regions, acknowledged the need for a more structured approach, focusing on regional resourcing and compliance to navigate the evolving regulatory landscape. As Australia tightens its crypto controls, it influences the overall approach in the region.
The clash between Easy Crypto and New Zealand banks regarding tighter crypto controls highlights the ongoing debate surrounding the regulation of cryptocurrencies. While the banks argue for stricter measures to mitigate risks, Easy Crypto advocates for greater access to financial services and the adoption of cryptocurrency advancements. The diverse approaches taken by different banks in New Zealand reflect their varying levels of caution and emphasize compliance with anti-money laundering and counter-terrorism finance obligations. As the regulatory landscape evolves, it remains to be seen how the relationship between the banks and the cryptocurrency industry will develop in New Zealand.