The world’s largest cryptocurrency exchange has been kicked off a major Australian payments service and banned by big four bank Westpac, with customers suddenly unable to deposit or withdraw funds from the platform.
Binance Australia – the local arm of the $6.7 billion crypto exchange Binance – told customers on Thursday afternoon they would no longer be able to deposit funds onto the exchange via PayID, a popular instant payment method. Withdrawal of Australian dollars to bank accounts has also been halted.
“AUD deposits by bank transfers are no longer available to Binance users in Australia due to a decision made by our third-party service provider. The suspension of this service is with immediate effect,” a spokesperson for the business said.
“Bank transfer withdrawals will also be impacted and we will advise users on timeline when this is confirmed. We are working hard to find an alternative provider to continue offering AUD deposits and withdrawals to our users.”
A spokesperson for Binance’s payment provider, Cuscal, said on Thursday the company was committed to stamping out scams and fraud in Australia, with a particular focus on crypto activity.
“Cuscal has strict due diligence, onboarding and compliance requirements for our clients and any of their customers and/or merchants. Where these requirements are not met, Cuscal will not onboard the client or allow the client to onboard or facilitate payments associated with their customers and/or merchants,” they said.
“Cuscal has, and will continue to, terminate any clients or their customers and/or merchants that do not meet our strict requirements.”
Similarly, major Australian bank Westpac also announced on Thursday it would prevent its customers from transacting with a number of crypto exchanges, including Binance, as part of a range of new scam-prevention methods. Other major banks may also be mulling similar action, sources familiar with the cryptocurrency industry said.
“Digital exchanges have a legitimate role to play in the financial ecosystem. But since the rise of digital currency, we’ve noticed that scammers are increasingly using overseas exchanges,” said Scott Collary, Westpac’s group executive of customer services and technology.
“Often our customers only discover they’ve been scammed after the money has left the country, making recovery extremely difficult.”
Westpac has stopped customers from transacting with a number of crypto exchanges, including Binance. The Age
Crypto exchanges halting withdrawals is often viewed as a grim omen by users and can be a precursor for deeper issues. A number of Binance Australia customers expressed their concerns on Twitter about the sudden decision, with one labelling the decision as “disgraceful”.
The company sought to assure users their crypto funds were safe under Binance’s Secure Asset Fund for Users (SAFU), which is an insurance fund that offers protection to Binance users and their funds in “extreme situations”.
Binance Australia’s sudden move is the latest in a line of complications for the local exchange, which was stripped of its financial services licence early last month and is the subject of a “targeted review” by corporate watchdog ASIC. In 2021, Binance abruptly stopped selling a range of complex derivative products to Australian customers as well after concerns were raised by ASIC.
Binance’s international business has also been accused of operating an “illegal” exchange and multiple allegedly “wilful” breaches of US trading law. Former employees have also accused the company of having a lax approach to regulatory compliance in Australia.
A spokesperson for Australian Payments Plus, which oversees the operation of PayID, confirmed it was not involved in the decision. “It is a matter for this organisation and its third-party payment service provider,” the spokesperson said.
Binance is the world’s biggest cryptocurrency exchange with revenue exceeding $US20 billion ($29.8 billion) and 30 million registered users, according to 2022 data. In Australia, it has 200,000 customers thanks to a huge marketing campaign and a large network of local influencers.
https://www.smh.com.au/business/companies/world-s-biggest-crypto-exchange-halts-withdrawals-for-australian-users-20230518-p5d9g1.html