Australian Treasury Takes Action to Address De-Banking Challenges in Crypto Industry

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KuCoin, a well-known cryptocurrency exchange, is upgrading its KYC system to better comply with worldwide anti-money laundering rules. New users will be needed to conduct KYC checks from July 15, 2023, in order to use Kucoin’s array of products and services. Existing customers who enrolled before July 15, 2023, will also be required to complete the KYC procedure in order to access some functionalities, such as depositing new money and withdrawing cash. Existing non-KYC customers will be allowed to continue using services such as spot trading sell orders, futures trading deleveraging, and margin trading deleveraging. According to KuCoin CEO Johnny Lyu, the new KYC mechanism would not only boost platform compliance but will also assist preserve the asset security of all cryptocurrency users. The upgrade will affect over 20 million registered accounts globally, with KuCoin being one of the world’s top exchanges by trading volume. Other exchanges have also tightened their KYC restrictions, with Bybit restricting non-KYC customers from withdrawing more than 20,000 Tether USDT ($1.00) each month. As of April 2023, cybercriminals were selling hijacked and validated crypto accounts on the darknet for $30.

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The Australian Treasury recognizes the gravity of de-banking and knows that delay may push the company underground owing to instances of banking partners turning off crypto platforms. Most of the Council of Financial Regulators (CFR) guidance on de-banking that might harm crypto-related firms is supported by the Treasury. Due to third-party payment service provider actions, the Australian government has recently imposed some limitations on the Commonwealth Bank and Binance Australia. The government agreed to the data-collecting suggestions and backed the recommendation that all banks undertake de-banking transparency and fairness measures. The government also agreed with the idea that Australia’s four major banks issue advice on digital currency exchanges. This comes as Blockchain Australia, the country’s industry group, renewed its commitment to reducing the intersection of crypto-assets and frauds by cooperating with payment providers and banks to eliminate scams and using innovative technologies.

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