Australian crypto exchange plans legal action against NAB for account closures
Oddities are afoot between myCryptoWallet and NAB.
"Due to National Australia Bank (NAB) closing our bank account without notice, we are sorry to inform you that all withdrawals are currently disabled until further notice. This does not affect deposits as we have opened a separate bank account to handle any future deposits," myCryptoWallet explained in an email to its users sent a few days ago.
"NAB has made absolutely no attempt to give us any reason or justification for why they have closed our business bank account. They carried out this action without notice or notification, and upon asking for an explanation, they have simply told us that they will get back to us in up to 5 business days. The most eminent concern we have with this situation is that all of our customers' funds are currently locked away in that account.
"We will be pursuing legal action against NAB for damages and gross negligence," it said.
Whose crypto wallet?
"We highly encourage you to contact NAB directly and demand an explanation for why they have seized your funds. They are currently in sole possession of all of our customers' funds and therefore until they reopen our account or reissue us with the balance, they are solely responsible for what happens with those funds," the exchange suggested to its customers.
The name myCryptoWallet coupled with this statement introduces an element of irony to the situation.
A recurring problem
Clashes between cryptocurrency exchanges and banks have been a recurring feature of the cryptocurrency world, and abrupt account closures are not unheard of all around the world.
In Chile, banks kept closing exchange accounts, and the struggle went in front of the court, which sided with crypto exchanges in the end. In Ireland, banks have reportedly been closing exchange accounts too. In one case, the Bank of Ireland closed the accounts of an exchange called Bitcove – a company that had actually won a Bank of Ireland-sponsored "best new startup" type award just a few months earlier.
Then in India, a central bank ruling currently prohibits commercial banks from serving crypto exchanges. It was meant to have been settled by now, but recurring delays have kept the pseudo-crypto-ban going. Meanwhile, Bitfinex's banking arrangements resemble a back alley shell game.
And back in Australia, there have been recurring reports of friction between banks, cryptocurrency services and individual users. A number of individuals have claimed that their bank accounts were shut after they started transacting with crypto, while several exchanges and other businesses have spoken out about similar problems. But for the most part, Australia's banks have maintained that they do not close customer accounts just because of crypto.
Banks closing crypto exchange accounts is a recurring thing all around the world, and in that respect, NAB abruptly closing myCryptoWallet's accounts isn't entirely unusual.
However, there are also reports of strangeness beyond a frozen bank account, including disabled crypto withdrawals and blocked withdrawals since the start of January.
Disclosure: At the time of writing, the author holds ETH.