Bank pulls support for cryptocurrency platform Cryptopia SUSAN EDMUNDS Last updated 12:11, February 1 2018 CHRIS HUTCHING/STUFF
Christchurch-based Cryptopia has become popular with traders around the world.
Bank moves to close cryptocurrency exchange Cryptopia’s New Zealand dollar trading accounts are bad news for Kiwi investors.
The exchange said that its bank had told it that it would close the accounts for its New Zealand dollar-tethered currency (NZDT) on February 9.
NZDT is used by New Zealand traders as a way into, and out of, cryptocurrencies on Cryptopia. It represents about 2 per cent of the trading on the platform.
Cryptopia has stopped accepting deposits into NZDT and customers who want to withdraw their funds will need to do so by February 9, unless another banking solution is found within that time.
READ MORE: * Cryptopia freezes trading in markets due to surge in demand
The exchange is also offering a competitive market rate to allow users holding NZDT to convert it to bitcoin.
“Due to the extremely short notice from the bank (and little opportunity to present our case and provide compliance documentation to demonstrate our commitment to the applicable regulations), we believe this is the best course of action to protect our users.
While we are working hard to secure alternative banking services, we have to prepare for the possibility that there may be a period of time between this closure and being able to provide these services again in future,” Cryptopia said in an update.
Users will still be able to buy and sell cryptocurrencies on other providers’ platforms and then trade those currencies across Cryptopia. “Unfortunately, our current bank has notified us that they intend to close our NZDT account on 9 February.” This is really disappointing by NZ banks.
In my experience trading with them, @Cryptopia_NZ seems a solid business and totally onto it re crypto. https://t.co/fUwe0hmaM6 — Richard MacManus (@ricmac) January 30, 2018
General manager Dave Sanders said he hoped it would not be long before another banking option was found. It was possible that a solution would be discovered before the February 9 cut-off. Ad Feedback
“It’s unfortunate for New Zealanders.
It’s likely to be temporary but it means that people have to resort to less secure ways of getting their cryptocurrencies … it’s a dangerous world out there.”
Commentator and Cryptopia trader Richard MacManus said he was aware of other New Zealand exchanges that had had their bak accounts closed.
New Zealanders would be forced to buy bitcoin and other currencies through overseas exchanges, he said. “It’s a bit of a painful process. You have to send a wire transfer to [the exchange that accepts it in Australia], a placed you don’t really know a lot about. It feels riskier than dealing with someone in New Zealand.
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New Zealand Bankers’ Association chief executive Karen Scott-Howman said anti-money laundering laws were one of the main reasons that banks struggled with cryptocurrencies. I just found out that Cryptopia [a NZ company I believe] has just closed down its NZDT market.. the NZ equivalent of Tether. This completely screws me as I am using both NZ dollars, and a NZ bank account tied to Cryptopia.
Any suggestions anyone? Robinhood? — dave the wave (@davthewave) January 30, 2018
“The Anti-Money Laundering and Countering Financing of Terrorism Act was implemented in June 2013. The law is designed to help protect New Zealand from financial crime, improve our financial reputation overseas, and meet our international obligations,” she said.
“Banks have an important role to play in meeting the law’s aims. They take their obligations under the law very seriously. They’ve invested heavily in policies, systems, processes and staff training to ensure they identify, manage and mitigate any risks that the law targets. ”
She said banks had to be able to identify the senders and recipients of funds, and the source of those funds.
“Banks approach this on a case-by-case basis.
The need for customer due diligence may affect some cryptocurrency traders and individuals transacting in cryptocurrencies.
“Banks operate in a very competitive environment and are in the business of attracting and retaining customers. That’s balanced by the need to take their compliance obligations very seriously. If they can continue to bank a customer within the bounds of their AML obligations, they will.”
ASB said it could not comment on Cryptopia’s case.
“However, we are currently reviewing our relationships with crypto-exchanges, while ensuring we comply with our regulatory obligations,” a spokeswoman said.
“Ultimately, our goal is to keep our customers safe as we turn our minds to a number of evolving business models, including crypto.
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* Comments on this article have been closed. – Stuff.
