SYDNEY, October 10, 2025 (Agencies): Major Australian banks are facing growing criticism from customers and consumer rights groups over the freezing and blocking of accounts linked to cryptocurrency transactions, as the country tightens its anti-money laundering (AML) and “Know Your Customer” (KYC) regulations.
In one of the most widely reported cases, Westpac froze a customer’s account after he attempted to transfer AUD 30,000 to the cryptocurrency exchange CoinSpot. The incident prompted public outcry and led Westpac CEO Anthony Miller to issue a formal apology for the way the situation was handled.
Customers across the country have reported similar experiences, with transactions to exchanges being blocked or accounts frozen by Westpac, ANZ, NAB, and CommBank. Banks maintain that these measures are designed to comply with regulatory requirements and to protect customers from fraud.
The enforcement actions come as Australia introduces stricter compliance obligations through the AML/CTF Amendment Act 2024. From March 31, 2026, banks will be required to conduct enhanced identity verification, ongoing risk assessments, and more stringent checks for high-risk transactions, including those involving cryptocurrencies.
Consumer advocates have accused banks of overreach, citing cases where customers were asked for extensive documentation or left without clear explanations for months-long account restrictions. Critics argue that the lack of transparency and communication has eroded public trust and raised concerns about financial surveillance.
AUSTRAC, Australia’s financial intelligence regulator, has emphasized that financial institutions must tailor their KYC procedures according to customer risk levels, while maintaining robust oversight to prevent money laundering and terrorism financing.
The debate continues over how to balance regulatory enforcement with individual financial freedoms. Privacy advocates warn that without stronger accountability measures, expanded KYC rules could lead to excessive intrusion into personal financial activity.