Bendigo deploys crypto block

Bendigo Cryptocurrency block

Bendigo Bank has announced it has placed a block on high-risk cryptocurrency transactions in an effort to stamp out investment scams and fraudulent payments.

The newly implemented crypto block targets high-risk instant payments to cryptocurrency exchanges.

These exchanges remain, at present, softly regulated in Australia.

In statement, Bendigo Bank’s head of fraud Jason Gordon noted that this “risk-based approach will add some friction to certain genuine payments”, though he added that the bank has a “responsibility to put measures in place that protect customers from bad actors”.

Scammers often seek payments in cryptocurrencies due to their limited traceability and the difficulty that payments providers face in recovering funds, as money is often quickly moved offshore.

Cyber-criminals are also known to set up fake crypto exchanges or trading apps that can steal an individual’s crypto investments, or various investment scams, including ‘pump and dump’ style scams, whereby a scammer can quickly cash out and disappear with the crypto coins once it hits a certain value.

“Investment scams can be highly sophisticated, very convincing and financially devastating,” Gordon said.

“Nearly half of all investment scams reported in 2022 resulted in a financial loss, so it’s vital we do all that we can to stop them.”

Australians reported combined losses of upwards of $1.5 billion to investment scams last year, as reported to the ACCC’s Scamwatch service. By category, this represents the vast bulk (66 per cent) of financial losses recorded by the regulator.

Further, more than 3,900 people reported cryptocurrency as their payment method to scammers, with $221.3 million lost as a result.