Lack of explanation

Chairman of industry body the Australian Digital Currency Commerce Association Ron Tucker, whose company Bit Trade is set to be "debanked" by Westpac, told The Financial Review on Monday that companies were being left in the dark about the reasons for their accounts being closed. One bitcoin exchange founder, who requested anonymity for fear of further raising the ire of banks, said his company had been left trying to get answers off low level call centre bank workers, to no avail.

"We are trying to collaborate with banks and are trying to get other arrangements in place but we haven't heard anything back and I don't know why," the company founder said.

"It may be about competition but it is not the right approach to just block other companies, without explaining your concerns."

When contacted about the matter Mr Sims said he had received Senator Canavan's letter and was considering how to proceed.

Nationals Senator Matthew Canavan has written to the ACCC calling for an inquiry into banks cutting off accounts for bitcoin exchanges. Jesse Marlow

Senator Canavan said his office had been contacted by businesses in the sector that were concerned about sudden account closures. He said that, in the light of news of Australian banks exploring the potential benefits of digital currency for their own business needs, an inquiry appeared to be warranted on a number of grounds.

These were the refusal to supply products or services without proper reason or clear justification, and misuse of market power – in particular whether the banking industry has engaged in conduct that takes advantage of its substantial market power for an illegal purpose.


Money laundering and terrorism

Acting chief executive of the Australian Bankers' Association Tony Pearson earlier said banks were obliged to close accounts if they couldn't see a full payments trail under anti-money laundering and counter-terrorism financing (AML/CTF) laws.

Senator Canavan said the ACCC should look at this as part of its investigation and consider whether the bitcoin companies were being treated unfairly.

"I would also ask that the issue of possible incompatibility of digital currency businesses with anti-money laundering/counter-terrorism funding laws, which have been raised as a possible reason for the banks refusal of service, be investigated," the senator wrote.

"In particular, the question of what documentary evidence/internal legal advice was considered prior to the decisions by different banks to close their customers' accounts."