ANZ Bank has settled a case brought by a DCE operator, Allen Flynn who alleged he was discriminated against over the bank’s decision to close his bank accounts because he used them to engage in cryptocurrency trading.
The closure of Mr Flynn's bank accounts was first in January 2018 and again in August 2019. ANZ issued a statement which said:
ANZ acknowledges that it closed Mr Flynn’s accounts because it detected he was operating a DCE (digital currency exchange), and without seeking information from Mr Flynn about the particular circumstances of his DCE business, including the ML/TF (money laundering/terrorism financing) risks and policies of that business.
Mr Flynn, having had bank accounts closed by ANZ and Westpac, launched action against both banks on the grounds that the cancellation of his bank accounts breached his human rights and unfairly discriminated against Flynn on the basis of his occupation. Senator Andrew Bragg has highlighted the approach by major banks to granting digital currency players (like Flynn) access to transaction bank accounts is a growing concern.
ANZ has denied any wrongdoing and not been found responsible for any discrimination but also said:
ANZ further acknowledges that this could, subject to the defence in section 57N, have amounted to unlawful discrimination contrary to sections 7(1)(p) and 20 of the Discrimination Act 1991.
Crypto News Australia questioned whether this settlement will set some kind of unofficial precedent (which isn't likely to be the case in our view). The case comes amid a national conversation growing around de-banking. As we've written about before, de-banking has been a growing issue in Australia of late, causing significant practical impediments for many companies and individuals wishing to expand in the digital currency space. The ongoing Senate Select Committee on Australia as a Technology and Financial Centre, headed by Senator Bragg has specifically addressed this issue in their final report.
Co-author and Partner at Piper Alderman, Michael Bacina was interviewed by Forkast News and in being asked about the bigger picture of ANZ and Flynn's settlement Mr Bacina, shared his hopes that the settlement would be a positive contribution to the topic of debanking:
Crypto businesses are wary about speaking out lest they be debanked as a result. Many will view this as a positive development, but I expect there will be a healthy dose of scepticism.
He continued:
The myth of digital assets being predominantly used for money laundering or crime is slowly being dispelled but conservative businesses will take time to educate themselves and understand that a traceable public blockchain is one of the worst places to launder money or commit crimes. Busts by the U.S. Department of Justice and work involving Chainalysis make this point quite clearly. Hopefully the actions that Mr. Flynn is bringing will help push that conversation forward.
Reportedly, Flynn's case against Westpac will be heard next week.