Bitcoin stalls amid account freeze claims linked to Australian banks

Bitcoin has started the year on the back foot with a row about account freezing by Australian banks causing concerns and for the first time since 2015, it began the new year by declining in value, continuing its slide from a record US$19,511 reached on December 18.

Reports emerged on Twitter, see below left, and were later backed up in the local Australian press including The Sydney Morning Herald that said that as the year drew to a close bank accounts in Australia associated with Bitcoin purchases were being ‘frozen’ alongside transactions that users may be making to some of the country’s most popular cryptocurrency purchasing sites.

The Australian banks which have been accused of freezing accounts of Bitcoin users have been listed as the National Australia Bank, ANZ, Commonwealth Bank of Australia, and Westpac Banking Corporation.

The claim was initially made in a tweet saying that user activity associated with certain websites (BTC Markets, CoinSpot Australia, CoinJar, and Coinbase) have been affected as triggering suspicious activity on Australian users’ bank accounts.

A Commonwealth Bank of Australia spokesperson responded to the accusations and has said in a statement: “Our customers can interact with these currencies as long as they comply with our terms and conditions and all relevant legal obligations.”

Bitcoin specialists Coinspot Australia also released the following statement on their site reading: “We assure you we are just as unhappy with the situation as you, but unfortunately Australian banks have been so far unwilling to work with the digital currency industry which leads to frequent account closures and strict limits on accounts whilst they remain operational, in effect debanking our industry.

CoinSpot founder Russell Wilson told Bitcoin news website Bitcoinist that he was not aware of any new widespread issue but was “monitoring” the situation. He said: “We are aware that on occasion banks will freeze payments while they clarify with their customers that the funds were not fraudulently sent from their account, this is standard best practice for the banks and protects everyone.

Fluctuating fortunes

The virtual coin traded at US$13,624.56 as of 5pm in New York on Monday, down 4.8% from Friday, according to data compiled by Bloomberg. That is also down from the US$14,156 it hit Sunday, according to coinmarketcap.com, which tracks daily prices. The cryptocurrency fluctuated in early Asian trading on Tuesday.

Bitcoin got off to a much stronger start in 2017, and then kept that momentum going, as a global frenzy for cryptocurrencies became one if the financial services taking points of the year. It rose 3.6% on the first day of 2017 to US$998, data from coinmarketcap.com show. It ended the year up more than 1,300 per cent.

The Bitcoin rally brought competitor offerings, and in December Wall Street took its first steps towards endorsing the controversial cryptocurrency market of issuing futures contracts. It reached its December 18 peak hours after CME Group debuted its derivatives agreements, which some traders said would encourage short position-taking.

ABOUT THE AUTHOR
Gary Robinson
Head of Video and Ezines at Open Door Media Publishing. Deputy Editor, International Investment. An experienced journalist and filmmaker with more than 20 years' financial services experience, both as journalist and originally as a fully qualified IFA, Gary works across both International Investment and InvestmentEurope titles. Previous video production credits include projects on BBC, C4 and SKY.

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