Cryptopia forced into bank account closure
Cryptopia, New Zealand based cryptocurrency exchange announced an immediate halt to New Zealand dollar-tethered (NZDT) deposits. This is in response to the notice that the exchange received from the bank regarding cessation of NZD deposits.
“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.”
Although the exchange platform further assures its users, committed services and complete access to funds, they express the probability of time lapse between closure and re-availability of services.
“While we are working hard to secure alternative banking services, we have to prepare for the possibility that there may be a period of time between this closure and being able to provide these services again in future.”
However, a recent update came as a sigh of relief to the users. The exchange informed the users that they have received an extension for withdrawals until 31 march from the bank.
“Attention all Kiwi users – we’ve been granted an extension on our NZDT account for withdrawals until 31 March from the bank. We’re still working on a number of options to resolve deposits and will update with news as it happens”.
Reasons for trading halt
Although analysts have their own arguments to explain the trading halt of Cryptopia, Co-founder Cryptopia, Rob Dawson believes that it is the enormous flood of registrations and scaling issues that need to be blamed.
“By the 1st of December, we hit 500,000 users. On the 31st of December, we hit 1,000,000 users. By the 3rd of January, we hit 1,100,000 users. By the 4th of January, even with registrations disabled for three hours, we hit 1,200,000 users.”-Dawson
However, Karen Scott-Howman, the chief executive at New Zealand Bankers’ Association said that banks responsibility of abiding by anti-money laundering laws make bank struggle with crypto trade and take such firm decisions.
“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. “- Karen.