Lack of regulation means some cryptocurrency start-ups are being 'debanked', with investors also at risk

Cryptocurrency is creeping into the mainstream but Australia’s laws have failed to keep up with the pace of growth, prompting calls from the industry for regulatory certainty.

Michaela Juric, also know as Bitcoin Babe, has been denied services from 91 banks. It’s what’s known as being debanked.

Ms Juric runs a cryptocurrency exchange that’s registered with the financial crimes regulator AUSTRAC. But that’s hasn’t been enough for the banks.

“When I started my business in 2014, I originally opened a bank account with Commonwealth Bank, it was shut down around six months later. And since then, it’s been a domino effect of account closures.”

A senate inquiry looking at ways to regulate cryptocurrency and digital assets has heard Ms Juric’s experience is not an isolated case.

Crypto start-ups Nium and Ausmerchant have also given evidence about their experience of being debanked.

Liberal Senator Andrew Bragg says banks are using a regulatory gap to ban start-ups from services.(

ABC News: John Gunn

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Liberal Senator Andrew Bragg is chairing the inquiry and said banks were using regulatory gaps to justify banning start-ups from its services.

“There has been some very troubling behaviour exhibited by banks, where there has been competition,” Senator Bragg said.

Cryptocurrency businesses need to register with the financial crimes watchdog AUSTRAC, but the inquiry has heard evidence that the application process does not have enough checks and balances. 

The inquiry has also heard criticism about corporate watchdog ASIC’s hands-off approach when it comes to going after cryptocurrency influencers that do the wrong thing. 

Crypto growing in popularity

There are 400 digital currency exchanges in Australia, according to AUSTRAC.

it’s estimated around one in six people own cryptocurrency totalling $8 billion, according to a survey by Finder. That’s despite the extreme price volatility. 

Cyrpto scams are also on the rise. More than $25.7 million was lost in Bitcoin scams in the first half of this year. That’s compared to $17.8 million in all of 2020.

“Cryptocurrency is very popular but it is not regulated. So at the moment people are purchasing cryptocurrency, but they’re doing that without any kind of consumer protection,” Senator Bragg said.

Fintech company Finder has made a submission to the inquiry calling for crypto deposits that are held with accredited deposit holders to be guaranteed like bank deposits.

“There’s a real perception that crypto is something for kind of young men who talk in strange languages and use lots of acronyms. And what I’ve found is, as crypto is becoming more everyday, more everyday people are looking to invest in it,” said Kate Browne, from Finder.

Kate Browne from Finder says consumers need to be wary of online cryptocurrency scams.(

ABC News: Adam Griffiths 

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Taxation and corporations law changes on the agenda 

Researchers from the RMIT Blockchain Innovation Hub want laws to be changed to allow investors to get financial advice and a public register of crypto exchanges.

“Consumers need more tools at their disposal in order to be able to do due diligence about who they’re interacting with,” said researcher and lawyer Aaron Lane from RMIT. 

Dr Lane’s submission also proposed changes to taxation laws like capital gains tax, which he argued do not reflect the nature of crypto-trading, which required multiple transactions.

“If Australia doesn’t update its tax and its corporate rules to take into account the massive innovation that’s occurred in the cryptocurrency space in the blockchain space, more broadly it risks being left behind,” Dr Lane said.

Asher Tan, CEO of Coinjar, has already moved his company’s headquarters from Melbourne to London. 

“A clear mandate for some of these new industries would be very helpful.”

But while the industry wants regulatory certainty, the inquiry has heard it is wary of being over-regulated. 

It wants the creation of a so-called safe haven, or safe harbour, to protect businesses from being retrospectively hit by ASIC under future laws.

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Globally, crypto is already going mainstream

El Salvador’s adoption of bitcoin as a legal tender has been overshadowed by protests against the use of the digital currency.

But analysts say Australia should look to the licensing and tax rules that are in place in Singapore, Canada, the UK, and Wyoming in the United States.

The lack of regulation locally has made banks sceptical about dealing with cryptocurrency businesses. They point to concerns about anti-money laundering and counter terrorism financing laws.

Ms Juric said she was told by a bank employee that a third-party monitoring system they used had put her on a suspected terrorist watch-list.

As a result, she was also blocked from signing up to phone, internet and electricity companies.

Things got so bad that in 2018 she changed her surname from Donlan to Juric.

“I essentially had to change my name so I could access to basic services.”

Ms Juric hoped the senate inquiry, which was due to report back next month, recommended protections for businesses owners like her. 

“I’ve received legal advice on this and because banks are private entities, no one can force them to do business with me or anyone for that matter. It’s essentially one of those things I have to cop.”