In the middle of the night, the Binance Australia team was suddenly told it would be “cut off” from the Australian banking system. The exchange’s regional manager, Ben Rose, claimed there was no prior warning, consultation or remediation.
On May 18, Binance Australian announced its dollar services were suspended after its payment provider Zepto was told to stop supporting Binance by Cuscal – Zepto’s banking and payment partner.
Rose told an audience at Australian Blockchain Week on June 26 that the move affected approximately 1 million Australian-based customers.
“We got a 24 hour notice to cut off our banking at 11.30pm in the evening, later it changed to 12 hours and so we had our banking cut off.”
“The reasons given weren’t very clear and they didn’t look that great in the media,” Rose said. Formerly spokesperson for Cuscal declined to comment on matters related to Binance Australia to Cointelegraph, but pointed to “fraud and scams related to cryptocurrencies”.
The limited information initially worried Binance customers, but “that tone changed pretty quickly” when it became clear that it was the broader local crypto industry that was “impacted by these banking changes,” Rose said.
On the same day that Cuscal pulled out of Binance, “Big Four” bank Westpac said it would begin attempts that block payments to crypto exchanges. Less than a month later, the Commonwealth Bank, another major Australian bank, followed suit payment blocks related to cryptocurrencies.
Speaking to Cointelegraph after his on-stage talk, Rose declined to provide any further information on Binance Australia’s search for an alternative third-party payment provider as discussions were ongoing.
Rose said there are other providers, but conceded Cuscal “banks most of the industry.”
Australia’s crypto industry has long relied on crypto-friendly payment providers, including Monoova, Zai and Zepto – all of which work with Cuscal to access the local banking system.
Cuscal-backed payment rails are used by Binance crypto exchanges, including BTC Markets, Kraken Australia, CoinJar, Independent Reserve, and many other crypto-related fintech firms.
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Rose argued on stage that the loss of access to its banking partner “had no real impact on the business”. He added that Binance users are “using other methods,” likely purchases and deposits to bank cards that are still supported on the platform.
He emphasized the need for cooperation with regulators and the banking sector and the possibility of introducing “sensible licensing” for the industry.
“We would urge Australia to move relatively quickly as jurisdictions around the world are now moving forward,” Rose said.
“We have a window as a country and we think there’s an opportunity, but there’s also a risk if we don’t start licensing relatively quickly.”
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