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New Zealand Cryptocurrency Exchange Forced into Bank Account Closure

Last Updated March 4, 2021 5:04 PM
Rebecca Campbell
Last Updated March 4, 2021 5:04 PM

Cryptocurrency exchange Cryptopia has announced that its bank is to close its New Zealand dollar-tethered (NZDT) trading accounts.

“Unfortunately, our current bank has notified us that they intend to close our NZDT account on 9 February. Due to this, we are announcing an immediate halt to NZDT deposits from COB today and we are asking all customers to cease sending NZD deposits to our NZDT account,” read an announcement from Cryptopia.

However, the exchange has received an extension from the bank on its NZDT account for withdrawals until the 31 March.

In a recent update , Cryptopia said:

We’re still working on a number of options to resolve deposits and will update with news as it happens.

Cryptopia is an exchange that enables traders to deposit, trade, and withdraw over 400 digital currencies including bitcoin and litecoin, according to its website. By converting New Zealand dollars to cryptocurrency by depositing it into the NZDT account, traders have a way of getting into and out of the market.

As a result of the closure, the exchange is offering a competitive rate to traders holding NZDT to convert to bitcoin. Cryptopia added that while it was searching for ‘secure alternative banking services,’ it was also preparing for the possibility that there may be a period of time between the closure and when they can deliver services again, adding:

Rest assured, Cryptopia is committed to ensuring our users remain the top priority and have access to their funds at all times.

Richard MacManus, a technology columnist and trader at Cryptopia took to social media  to say that it wasn’t just Cryptopia that was facing problems with banks in the country.

I’m hearing that at least one other NZ crypto exchange is having trouble with NZ banks. So it’s not just @Cryptopia_NZ. The problem here is the NZ banks, who are preventing kiwis from fully participating in #bitcoin & #blockchain revolution.

This is in stark contrast to Australian banks, which have ruled out banning customers from purchasing digital currencies such as bitcoin. Yet, according to Karen Scott-Howman, New Zealand Bankers’ Association chief executive, one of the main reasons that banks are struggling with digital currencies was due to anti-money laundering laws .

She said:

Banks have an important role to play in meeting the law’s aims. They take their obligations under the law very seriously. They’ve invested heavily in policies, systems, processes and staff training to ensure they identify, manage and mitigate any risks that the law targets.

She added that banks were required to be able to identify the senders and receivers of funds, as well as knowing the source of where those funds were coming from.

Featured image from Shutterstock.