TLDR
- Westpac CEO Anthony Miller apologized after the bank froze a customer’s accounts when he tried to transfer $30,000 to crypto exchange CoinSpot
- The customer, known as Tim, had his accounts frozen for nearly a week after being questioned about the purpose of the transfer
- Tim claims he missed out on $6,500 in potential Bitcoin gains due to the delay
- Westpac defends their general anti-scam practices, noting 1 in 5 flagged crypto transfers are linked to fraud
- The incident comes as Australian government moves to address “debanking” concerns while implementing new crypto licensing reforms
The CEO of Westpac, one of Australia’s “Big Four” banks, has issued a public apology after a customer’s accounts were frozen when he attempted to transfer funds to invest in Bitcoin. The incident highlights growing tensions between traditional banking and cryptocurrency investments in Australia.
On Wednesday, Westpac CEO Anthony Miller apologized to a customer known only as Tim after the bank blocked his $30,000 transfer to Australian crypto exchange CoinSpot and froze his accounts for nearly a week.
Tim had deposited $50,000 into his Westpac account earlier this month. When he tried to move a portion to CoinSpot to invest in Bitcoin, the transaction was halted, triggering a call from Westpac’s risk management team.
Customer-Bank Confrontation
Tim recorded the conversation with the bank’s staff member, who repeatedly challenged him on the purpose of the transfer. The recording, which Tim played on Sydney’s 2GB radio, revealed a tense exchange.
“I am genuinely trying my best to help you out as best as possible,” the Westpac staff member said in the recording. “But I feel as though, so far, you are trying to tiptoe around the answers and simply tell me what you think I want to hear to have this pushed through as soon as possible.”
Tim expressed frustration during the call. “You’ve got my money. I’d love my money back,” he said, arguing about over-regulation and his right to use his own funds.
The bank staff member remained firm, stating: “It’s because you are using our banking platform. You’ve agreed to our terms and conditions… We’re not going to be able to facilitate this payment if you’re not forthcoming and honest.”
After his accounts were finally unfrozen, Tim withdrew all his money and switched to another bank. He claims the delay caused him to miss out on approximately $6,500 in potential gains due to a rise in Bitcoin’s price during the lockout period.
Bank’s Defense of Anti-Scam Measures
In a radio interview with 2GB, Miller defended Westpac’s broader anti-scam measures while acknowledging this specific case was mishandled.
“We’ve got a real priority to make sure our customers understand it’s a really dangerous, murky area to participate in and so we’re trying to do the right thing by the customers,” Miller explained.
He noted that one in five crypto transfers flagged by the bank in the past month were linked to fraud. However, he conceded that Westpac needed to improve how it communicates during such interactions.
“We can certainly improve our delivery on that one and there’s no doubt that we’ll look at more coaching,” he said. “We also need to be more sensitive to customers, it’s their money, we completely understand.”
Broader Context of Debanking Concerns
The incident comes as the Australian government moves to address “debanking” concerns for individuals and businesses in the crypto sector. Debanking refers to the practice of financial institutions cutting off services to customers involved with digital assets.
In March, the Australian government outlined a new regulatory framework for digital assets. The reforms will require major crypto platforms to obtain an Australian Financial Services License while exempting smaller-scale firms.
According to the Australian Federal Police, more than $382 million was lost to investment scams in the 12 months to August last year. Nearly half of these losses, around $180 million, involved cryptocurrencies.
A Yahoo Finance poll of more than 7,700 readers found that 77 percent believe banks have no right to question customers about their money. However, banks maintain these processes are in place to protect customers from fraud.
Tim, who had been a Westpac customer since he was 12, expressed his frustration at being denied access to his own money. “He just had no intention of pushing it through, and just no intention of letting me have the freedom to use my own after-tax dollars,” he told 2GB Radio.
The controversy was further fueled when a Westpac executive mistakenly left Tim a voicemail intended for a colleague, commending the staff member’s handling of the situation despite the controversy.
For their part, banks including NAB and Westpac have told media that their questioning processes are designed to protect customers from fraud or scams. They point to numerous cases where bank intervention has prevented customers from falling victim to scams.
The AFP also notes that victim demographics are changing, with scam victims now more likely to be under the age of 50 rather than older Australians who were traditionally seen as more vulnerable.
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