New Zealand Banks Enforcing Tight Crypto Controls on Industry

New Zealand-based Easy Crypto recently accused major banks in the region of bullying as they administer tighter crypto control on transactions and bank accounts of industry players.

According to local reports, the top five banking institutions have responded by defending their firm stance.

Strict New Zealand Crypto Controls Causing Problems With Banks

In response to accusations of “bullying,” the main banks in New Zealand gave their perspective on what many industry players feel are overly-strict rules. According to 1news, the banks feel a tough approach is necessary given the risks associated with crypto worldwide. They also believe that the general state of the market doesn’t allow leniency.

The statement comes shortly after the securities regulator of the neighboring country of Australia revoked the financial services license held by Binance Australia. In the meantime, the Australian government recently stated that it might outright forbid deep fakes as a means to control and regulate AI. Australian senator Andrew Bragg previously advanced a bill that called for a crackdown to control the local cryptocurrency business.

Therefore, it is unsurprising that NZ banks have laid down tight crypto controls, especially after the collapse of FTX.

Easy Crypto co-founder and CEO Janine Grainger recently claimed that major banks frequently fail to execute transactions made to cryptocurrency companies. Grainger also said that they even refuse to open accounts for companies involved in the industry.

The top executive also urged the government to step in and order banks to permit law-abiding crypto users access to financial services. She also emphasized how crucial it is for banks to adopt the advancements brought about by cryptocurrencies. Grainger also thinks they should avoid restrictive policies that prevent their clients from participating in the market.

However, different banks in New Zealand have put in varying approaches to regulate these transactions.

Different Banks Taking Different Approach

According to reports, ASB prioritizes client security while placing crypto in a complicated regulatory environment. They have reportedly prioritized counter-terrorism financing, sanctions, and anti-money laundering regulations.

Westpac New Zealand seems the most cautious. It has referred to the digital currency exchange industry as high-risk. Because of this, it does not routinely provide banking services to its participants.

ANZ also maintains a conservative stance but permits customers to make certain cryptocurrency transactions as long as they do not involve any commercial interests.

BNZ follows regulatory advice, categorizing cryptocurrencies as high-risk and setting thresholds for onboarding customers in this sector. Kiwi Bank and ASB Bank take a more open position, assessing potential customers on a case-by-case basis. Reports underline that they emphasize compliance with anti-money laundering and counter-terrorism finance obligations.

Meanwhile, Binance, which was recently hit by a lawsuit in the U.S., had significant aspirations for Australia and New Zealand. In a recent conversation, Ben Rose, the Regional General Manager of Binance in the two regions, stated that the exchange is adopting a more structured approach. Rose noted that Binance is attempting to “get regional resourcing and compliance right” with regard to the two markets. This comes as Australia implements tighter crypto controls to regulate the sector.