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Binance Australia Cut Off from Banking System, Leaving 1 Million Customers Impacted

In a shocking development, Binance Australia’s team was abruptly informed that it would be severed from the country’s banking system, leaving no room for prior consultation or recourse. The move, which came without warning, has affected approximately one million customers. This article examines the sudden disconnection and its implications for the local crypto industry.

Binance Australia’s dollar services were suspended on May 18 after its payments provider, Zepto, received instructions from Cuscal, its partner banking and payments provider, to cease support for Binance. Ben Rose, the exchange’s regional manager, revealed during Australian Blockchain Week that the disconnection had a significant impact on Australian customers. The lack of clear reasons and negative media coverage surrounding the move raised concerns. Cuscal, while declining to comment specifically on Binance Australia, alluded to crypto-related scams and fraud.

The initial apprehension among Binance customers quickly changed when it became apparent that the broader local crypto industry was affected by the banking changes. On the same day, Cuscal offboarded Binance, Westpac, one of the “Big Four” banks in Australia, announced trials to block payments to crypto exchanges. Commonwealth Bank, another major Australian bank, followed suit with similar payment blocks. Binance Australia is currently exploring alternative third-party payment providers, but discussions are ongoing and no additional information was provided.

The Australian crypto industry has traditionally relied on crypto-friendly payment providers like Monoova, Zai, and Zepto, all of which access the local banking system through Cuscal. Many peer crypto exchanges, including BTC Markets, Kraken Australia, CoinJar, Independent Reserve, and other fintech firms, utilize Cuscal-backed payment rails. Despite losing access to their banking partner, Rose stated that it hasn’t had a significant impact on Binance’s operations. Users are now resorting to alternative methods, such as purchases and deposits to bank cards, which are still supported on the platform.

Rose emphasized the importance of collaboration with regulators and the banking sector, suggesting the implementation of sensible licensing for the industry. He urged Australia to act promptly, as jurisdictions worldwide are progressing in this regard. Highlighting the country’s unique opportunity, he warned of the risks involved if licensing is not pursued swiftly.

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.