National Australia Bank Severs Ties with Bitcoin Clients

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National Australia Bank Severs Ties with Bitcoin ClientsThe National Australia Bank said it is doing away with virtual currencies, claiming that they are too risky. It sent letters to its corporate customers who deal with bitcoin and such cryptocurrencies, saying it will close their accounts on May 2.

The briefs sent to the customers noted that NAB’s internal review arrived at a conclusion ties with bitcoin and other digital currencies are too risky to its business and reputation. Though NAB has never traded or banked in digital currencies, it has provided banking services to bitcoin companies.

“NAB continually reviews its risk profile and the businesses we bank, ensuring NAB’s activities are in the best interest of our customers and our shareholders,” said a NAB spokesman, according to the Associated Press.

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The move follows a recent decision by the Bank of Montreal and the Bank of Ireland to server ties with clients that trade in bitcoin and other virtual currencies. It was also informed by the recent bankruptcy lawsuits in U.S. and Canada involving bitcoin exchange Mt Gox that has roped in Japanese lender Mizhuo, which provided Mt Gox with banking services.

Mt Gox, which until its collapse was the world’s largest bitcoin exchange, said on February that hackers had stolen all of its bitcoins.

CoinJar, one of Australia’s biggest bitcoin dealers and a NAB client, expressed its disappointment with the news on a statement posted on a blog. However, its co-founder Asher Tan praised NAB for giving his company an early notice.

Most Australian banks are uncomfortable with the virtual currencies and often close down banking services, according to Robert Masters, who is the CEO of Krypto Currency Solutions, a digital currency trader.

To contact the reporter of this story; Deepak Tiwari at deepak@forexminute.com