On May 18, Binance Australia made an announcement regarding the suspension of its dollar services. This action was taken in response to instructions received by Zepto, Binance’s payments provider, who was directed to cease their support for Binance by Cuscal, the partner banking and payments provider of Zepto.
During the Australian Blockchain Week on June 26, Binance regional manager Ben Rose addressed the audience, highlighting the significant impact of the move on approximately 1 million Australian customers.
This unforeseen development occurred without any prior notice, consultation, or opportunity for recourse. So, Binance customers expressed their concerns due to the initial lack of information, as acknowledged by Rose.
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He further stated that the reasons provided were not fully transparent and did not portray a positive image in the media and to the customers of the exchange. As the situation unfolded, it became evident that the broader local cryptocurrency industry was being affected by these banking changes.
Following Cuscal’s disassociation from Binance, a significant development occurred when Westpac, one of Australia’s “Big Four” banks, publicly declared its plan to restrict payments to cryptocurrency exchanges.
Within a month, the Commonwealth Bank, another major Australian bank, also implemented similar payment blocks concerning cryptocurrencies.
Despite the upheaval, Rose claimed that losing access to their banking partner “hasn’t had a real impact on the business.” He indicated that Binance users are “using other methods,” likely referring to purchases and deposits to bank cards that are still supported on the platform.
Binance Australia Given 12 Hours’ Notice Before The Banking Disconnection
Binance Australia revealed that they were informed about the abrupt disconnection a mere 12 hours before it took place.
Binance regional manager Ben Rose stated at the Australian Blockchain Week:
We received 24 hours’ notice of debanking at 11:30 pm in the evening, that was later turned into 12 hours, and so we had our banking cut off.
Amid ongoing discussions, Binance Australia chose not to disclose any additional details regarding their search for an alternative third-party payments provider.
Rose accepted that while there are other providers available, Cuscal was the dominant player in servicing the majority of the crypto industry in the country.
Australia’s crypto industry has traditionally relied on Cuscal’s partnered payments providers such as Monoova, Zai, and Zepto to gain access to the local banking system, which has been recognized for its crypto-friendly approach.
Binance Australia emphasized the importance of collaborating with regulators and the banking sector, underscoring the potential for implementing “sensible licensing” within the industry.
The platform has also emphasized the need for Australia to act swiftly, citing that jurisdictions worldwide are progressing in this regard. They highlighted the window of opportunity for the country, while also cautioning against the risks associated with delayed implementation of licensing measures.