Bitcoin Babe refused by 91 banks, put on terrorism watchlist, ‘bullied’ by Austrac

The Sydney cryptocurrency entrepreneur behind the Bitcoin Babe peer-to-peer trading platform says she’s been shunned by 91 financial institutions, put on a terrorism watchlist and “bullied” by Austrac.

Michaela Juric, a 28 year-old who runs her Bitcoin Babe business from her home in the western Sydney suburb of Kingswood, told the Senate’s Australia as a Technology and Financial Centre inquiry on Wednesday that the process of being debanked – where a bank stops dealing with a customer – had a significant impact on her personally.

“I’ve been very grateful for my seven years in the crypto community and all that I’ve learned, and the people that I’ve met. But at the end of the day, the irreversible damage to my livelihood has been done,” she said.

Michaela Juric, known as Bitcoin Babe, appears before the Senate’s Select committee on Australia as a Technology and Financial Centre.Credit: Fairfax Media

Ms Juric set up Bitcoin Babe in 2015 and describes herself on Twitter as a “sensual provocateur for all your traditional financial nonconformity pleasures”. Her business allows for people to trade cryptocurrencies through a peer-to-peer network.

Ms Juric was giving evidence before the inquiry being held by the Select Committee on Australia as a technology and financial centre, alongside two other groups operating in the fintech sector - Drummoyne-based digital currency provider Aus Merchant and Singaporean ‘unicorn’ payments platform firm Nium, a large business that has bank relationships in 40-plus countries around the world and holds an Australian Financial Services Licence.

The debanking of groups operating in the cryptocurrency and currency remittance sectors is a hot topic for the inquiry chaired by Senator Andrew Bragg, which is assessing various ways to improve the sector, potentially through new regulation.

‘I’ve had banks go as far as report me as being like a terrorist on some databases.’

‘Bitcoin Babe’ Michaela Juric

Cryptocurrency sits outside of Australia’s regulatory framework, other than that operators are obliged to follow know-your-customer and anti-money laundering/counter-terrorism laws (AML/CTF). Australia’s major banks have been reluctant to deal with companies in the sector due to concerns they are not properly adhering to those laws. Two big banks – CBA and Westpac – have in the past few years been slugged with huge fines ($700 million and $1.3 billion, respectively) for breaches of AML/CTF laws.

Aus Merchant, Nium and Bitcoin Babe are all registered with Austrac, meaning they have to provide suspicious activity reports if they think their businesses are potentially being used for illegal activity, in the same way that all other financial institutions in Australia are required to do.

Ms Juric told the committee she had previously had dealings with Austrac that included legal threats, but the financial intelligence watchdog had taken no action against her at any point.

“The way that I was approached was quite aggressive. It originally came about as ‘we want to review your compliance manual, and if we find things wrong with it will shut down your business’, and there were all sorts of threats of legal action,” she said.

“I think there’s definitely some bullying tactics going on, at least from the small business perspective as opposed to the large ones, I believe.”

Ms Juric said as well as debanking her business, banks had also debanked her personal accounts and the accounts of people she was related to or lived with. Lenders doing this included the Commonwealth Bank, where she had held an account since she was five years old, she said.

“I’ve had banks go as far as report me as being like a terrorist on some databases, and that’s what stopped me from being able to get some of these services,” she said.

”Which clearly isn’t the case. I mean, if I’ve been doing this for seven years, if I was doing something bad, I think I’d be locked up at this point.”

Representatives from Aus Merchant and Nium told the inquiry their companies had been debanked by financial institutions, though Aus Merchant was working with its current bankers to resolve their concerns by offering to submit more detailed information about its business.

Michael Minassian, Nium’s Asia-Pacific head of consumer business, told the inquiry he believed it was a common theme that groups were debanked because they competed with the banks.

“It is within the bank’s terms and conditions, (they can) cease offering services at their will. So to that end, there’s no real opportunity to appeal the decision and to gain any further clarity as to why you’d be denied.

“The reasons that are given by the banks are very opaque,” Mr Minassian said.

The Commonwealth Bank, along with other major lenders, provided a submission to the inquiry defending its practices.

“As part of our ongoing due diligence with customers, we seek to understand their activities and, at times, may need to request information about their source of funds and source of wealth.”

“This enhanced customer due diligence requires assessment of our business customers to determine the level of risk they pose, to ensure CBA puts in place commensurate systems and controls to mitigate and manage its ML/TF risk.”

“In circumstances where a customer’s source of funds and source of wealth is unable to be determined, or their account activity is not in accordance with known business activities, the group takes appropriate steps to mitigate and manage its ML/TF risk,” CBA said in its submission.

“This may include ceasing the business relationship with the customer.”

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