Banks have choked funds transfer business Technocash, which said on Friday that it was "
closing its money moving business."
It may be able to continue trading if negotiations with an unidentified Singaporean-based company interested in acquiring its payments platform bear fruit.
In early June, US authorities included some Technocash bank accounts in Australia on a list of "forfeitable property" linked to seven men charged in connection with money-laundering claims. These relate to Costa Rican-based Liberty Reserve.
Technocash said it was "caught up in the US government's action against Liberty Reserve and has suffered collateral damage."
"We had been open until today providing services for our clients, but, clearly, this is no longer viable because our Australian banks have been closing our accounts so we can no longer operate.
"We are taking steps to return customers' funds given the current circumstances and extremely limited banking services."
Banks likely to have closed accounts include Westpac (which was named by US authorities), as well as National Australia Bank and Bankwest.
Mt.Gox, a Bitcoin exchange based in Japan, advised users overnight two weeks ago that it had decided customers in Australia would no longer be able to deposit and withdraw funds in AUD using Technocash.
In a letter to clients, reported by
Forex Magnates, Technocash said it was in negotiation with a Singaporean-based company that had contacted the firm before the Liberty Reserve matter arose because it was interested in acquiring Technocash's payments platform. As a result of current events, Technocash said, "shortly, a new payments processor will be created."
Technocash said on Friday: "We note that Liberty Reserve was allowed to operate for years in many countries using Amazon-provided IP addresses, according to www.out-law.com. There is no prohibition on virtual currencies and many of the world's biggest companies have created their own virtual currencies.
Technocash has complied with Australia's comprehensive anti-money laundering regime and verified its customers. It has held an Australian Financial Services licence since 2003.
"Technocash denies any wrong doing. This action by our banks is unfair and has caused significant distress to our customers, staff and shareholders."