Australia’s NAB Bars Payments to ‘High Risk’ Crypto Exchanges

National Australia Bank is blocking some cryptocurrency payments amid a nationwide wave of crypto scams.

The bank (NAB) on Monday (July 17) announced it was introducing new customer protections by prohibiting some payments made to “high-risk” exchanges.

According to a bank news release, nearly half of all scams reported to the Australian Financial Crimes Exchange were tied to cryptocurrency in a recent 30-day period. The bank added that crypto scams are among Australia’s biggest security threats, with consumers there losing more than $221 million to such scams in 2022.

“These scammers are part of organized, transnational crime groups. Increasingly, we’re seeing them use cryptocurrency platforms to send stolen funds quickly and often overseas,” said Chris Sheehan, the executive who oversees NAB’s group investigations.

The news was part of a larger announcement by NAB that it had intervened in more than $270 million in customer payments which raised scam concerns between March and July of this year. NAB said that when customers received a real-time payment prompt in the app, 12% of payments were abandoned.

In addition, Sheehan said the bank’s work with telecommunication companies to stop fraudsters from infiltrating phone numbers and legitimate text message threads had driven a 29% decrease in reports of NAB-branded spoofing scams between January and May.

NAB’s announcement comes weeks after another financial institution, the Commonwealth Bank of Australia, said it had begun declining or holding for 24 hours certain payments to cryptocurrency exchanges.

The bank also plans to start limiting customer payments to exchanges for cryptocurrency purchases to 10,000 Australian dollars (about $6,700) in a calendar month.

“With the incidences of scams increasing and in many cases customers suffering significant losses from being scammed, the introduction of 24-hour holds, declines and limits on outbound payments to cryptocurrency exchanges will help reduce both the number of scams and the amount of money lost by customers,” James Roberts, general manager of group fraud management services at Commonwealth Bank, said in a news release.

This is happening as financial fraud grows increasingly complex as it evolves in the digital age, as PYMNTS wrote last week.

On one hand, fraud last year was at its lowest rate since 2014, impacting 65% of organizations, with 45% of all U.S financial service firms having fully integrated digital fraud prevention systems, compared to 28% in 2020.

At the same time, fraud has managed to find new ways to spiral upward, with FinTech fraud increasing by 13% in 2022.

“Threats such as identity fraud are taking a severe toll on the sector, with nearly half of all FinTechs impacted by the use of fake documents,” PYMNTS wrote.

“These findings suggest that while the financial industry is responding to the challenge, vigilance and adaptability will be key to succeeding as fraudsters continue to seek — and find — loopholes in defenses at every turn.”