The Australian arm of crypto exchange Binance suffered a setback on Thursday after the local platform lost access to some Aussie dollar deposit services and warned of disruption to bank transfer withdrawals.
A Binance Australia spokesperson said it can no longer offer Aussie dollar deposit services due to a decision by Cuscal, “our payment processor’s partner bank.” The exchange said PayID deposits are no longer available and that local currency bank transfer withdrawals are presently open but will be impacted.
“We are working hard to find an alternative provider to continue offering AUD deposits and withdrawals to our users,” Binance Australia said, adding clients can still buy and sell using debit and credit cards.
Cuscal said earlier in a statement that its primary focus is on “protecting Australians from financial crimes and scams” and that it doesn’t have a comment on any other parties at this point.
Also on Thursday, Westpac Banking Corp. — one of Australia’s largest financial institutions — said it had “begun trialling new customer protections for some cryptocurrency payments to reduce scam losses.”
“Digital exchanges have a legitimate role to play in the financial ecosystem,” Scott Collary, group executive customer services and technology at Westpac, said in a statement. “But since the rise of digital currency, we’ve noticed that scammers are increasingly using overseas exchanges.”
Westpac didn’t immediately respond to a request to clarify whether it has banned transactions involving Binance.
Web of Probes
Binance is the largest exchange in the controversial digital-asset sector. Its global business and a US platform are the subject of a web of probes. In April, the Australian Securities and Investments Commission canceled Binance’s license for its derivatives business in the country as it conducts a review of the group’s local operations.
The US Commodity Futures Trading Commission earlier this year sued Binance and its Chief Executive Officer Changpeng “CZ” Zhao for allegedly violating derivatives regulations and accused the firm of having “sham” compliance procedures. Binance has called the lawsuit “unexpected and disappointing.”
Access to banking has been a perennial difficulty for crypto firms. The challenge intensified this year amid heightened regulatory scrutiny after 2022’s digital-asset rout and a series of bankruptcies and scandals, most notably the collapse of the FTX exchange.
In the latest developments in Australia, other digital-asset platforms haven’t so far reported a loss of access to local currency payment rails.
--With assistance from Adam Haigh.
(Updates from the second paragraph with Binance citing the impact of a decision by Cuscal.)