CBA (ASX:CBA) share price lower amid crypto defamation lawsuit

Australia’s largest bank seems to be in a spot of bother from both ends.

| More on:
asx company executive with multiple fingers all pointing at him

Image source: Getty Images

The Commonwealth Bank of Australia (ASX: CBA) share price is slipping on Monday. This follows Australia’s largest bank being accused of defamation by a Colombian-Australian remittance service that utilises cryptocurrencies.

At the time of writing, the CBA share price is 0.25% lower to $100.84 apiece. The downward movement means shares in CBA have now fallen 4.5% in the past month.

Banks and crypto continue to lock horns

In the latest jousting contest between traditional banks and pro-crypto fintechs, CBA has landed itself in hot water. According to reports, remittance company Colcambios Australia has accused the Aussie bank of defamation.

Colcambios provides low-cost money transfers between Colombia and Australia. To do this, the company exchanges and transfers pesos and Australian dollars using cryptocurrencies.

Allegedly, CBA wrote letters to customers of Colcambios, suggesting that the money in their accounts was from fraudulent activities. This was in addition to the remittance company being framed as scammers, with the letters warning its customer’s safety was at risk.

An example of one such letter, accompanied by the claim filed with the District Court of NSW, reads:

After a thorough review of your concerns raised, we have good reason to believe you have fallen victim to a scam. Scammers often use messaging apps such as WhatsApp to lure students in with the rewards of quick/easy money. Students are asked to receive funds, then on-forward most of the funds to the scammers/another party, the students will keep a commission.

As a result, Colcambios’ director alleges that the claims have impacted its customer’s perception of the company. However, there are always two sides to every story, and CBA has shared its own version. The ensuing legal matter appears to be weighing on the CBA share price today.

According to CBA, it was imparting information that it believed it had a legal duty to share. This is unsurprising, given the mounting pressures for appropriate actions in accordance with anti-money laundering and counter-terrorism legislation.

Additionally, the bank mentioned it had not mentioned Colcambios Australia by name in any of its letters.

CBA share price in perspective

While the CBA share price struggles at its start to the week, the Aussie benchmark index is powering higher.

At the time of writing, the S&P/ASX 200 Index (ASX: XJO) is up 0.28% to 7,427.1 points. Leading the charge upwards are mining and energy shares.

Finally, CBA shareholders might find solace in the share price holding above $100 per share.

Should you invest $1,000 in Commonwealth Bank of Australia right now?

Before you consider Commonwealth Bank of Australia, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Commonwealth Bank of Australia wasn't one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

Motley Fool contributor Mitchell Lawler owns shares of Commonwealth Bank of Australia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Bank Shares