New Zealand Bitcoin Exchange BitNZ to Shut down After Banking Blackout

Journalist:
February 14, 2017

BitNZ, a New Zealand bitcoin exchange, has announced it is closing due to the refusal of New Zealand banks to allow bank accounts to trade bitcoins, and has advised customers to withdraw all funds before April 15, 2017, the company announced on its website.

BitNZ also announced its decision on Reddit, noting that it is impossible to continue operations.

BitNZ thanked customers for their support and noted it has processed over 11,000 bank transactions since 2011.

Banks Uncompetitive

BitNZ said the banks’ position is anti-competitive, raising the question of whether there is a fairness regulator in New Zealand.

One poster noted that they stopped using BitNZ due to the banks’ refusal to trade bitcoins, but that BitNZ had always provided great service. The poster said they probably paid thousands of dollars in bank fees as a result of the trading they did on BitNZ.

Another Reddit poster asked if BitNZ attempted to comply with KYC (know your customer) and AML (anti-money laundering) rules. A response to this post noted BitNZ did attempt to comply, but it was too much work since it was just one person. The response noted that there is no service in New Zealand for identification and KYC compliance.

Other Uncompetitive Actions

Another Reddit post noted the New Zealand banks’ action is not the only sign of the anti-competitiveness of both New Zealand and Australian banks, citing efforts to prevent Apple Pay from competing in those markets.

Apple has criticized Australia’s banking industry for trying to delay or prevent the use of Apple Pay, according to stuff.co.nz, a New Zealand news site. The Australian banks include National Australia Bank, which owns Bank of New Zealand.

The Australian Competition and Consumer Commission (ACCC) said in October it would scrutinize Australia’s “Big Four” banks for attempts o swallow fintech companies developing technologies like blockchain solutions.

Meanwhile, Apple is battling Australia’s “Big Four” banks, which include Australia and New Zealand Banking Group, over access to its Apple Pay platform. The ACCC is deliberating over a collective proposal by the banks demanding Apple allow access to its mobile payment platform.

Also read: New Zealand authority posts warning about crypto exchange IGOT

2015 Investigation Cleared Banks

In 2015, Queensland Senator Matthey Canavan urged the ACCC to investigate the possibility of banks engaging in anti-competitive behavior after closing and denying banking services to bitcoin operators, without any formal explanation.

The action resulted in the ACCC investigating those banks. Several months later, the banks were cleared of colluding against the closure of at least 17 bitcoin companies’ bank accounts.

BitNZ also operates bitcoin ATMs, according to its website.

One Reddit post said the “overflow” from BitNZ closure will hopefully make the banks become more cooperative with regards to bitcoin.

Image from Shutterstock.

Lester Coleman

Lester Coleman is a media relations consultant for the payments and automated retailing industries.