The Unexpected Debanking: Binance Australia Faces Abrupt Disconnect from Local Banking System
The post The Unexpected Debanking: Binance Australia Faces Abrupt Disconnect from Local Banking System appeared first on Coinpedia Fintech News
Binance Australia, one of the leading crypto exchanges, experienced an unexpected jolt when it was abruptly severed from the Australian banking system in May. The regional manager, Ben Rose, has claimed that they were informed about this dramatic shift just 12 hours before the disconnection.
A Midnight Shock: Binance Australia’s Unexpected Banking Cut-off
In an unprecedented move that sent shockwaves through the crypto community, Binance Australia was abruptly cut off from Australia’s banking system. This surprising development came without any prior warning, consultation or opportunity for redress.
On May 18, Binance Australia announced that its dollar services were suspended after its payments provider Zepto was instructed by Cuscal, Zepto’s banking and payments partner, to stop supporting Binance.
According to Rose, who spoke at the Australian Blockchain Week on June 26, this sudden decision affected approximately one million customers based in Australia.
A Veil of Uncertainty: The Mysterious Reasons Behind Debunking
The reasons behind this sudden disconnect remain shrouded in mystery. “The reasons given were not entirely clear and didn’t look that great in the media,” said Rose.
While Cuscal has refrained from commenting on Binance Australia-related matters, it has pointed to crypto-related “scams and fraud” in the past.
Rose expressed that the initial lack of information caused concern among Binance customers. However, the atmosphere quickly shifted when it became apparent that the broader local crypto industry was being impacted by these banking changes.
The day Cuscal disassociated itself from Binance, Westpac, one of the “Big Four” banks in Australia, announced its intention to block payments to crypto exchanges. Less than a month later, the Commonwealth Bank, another major Australian bank, initiated similar crypto-related payment blocks.
Navigating the Future: Looking for Alternatives and Regulation
In the face of these significant challenges, Binance Australia is now exploring alternatives for a third-party payment provider. Rose was tight-lipped about the progress of these ongoing discussions. While acknowledging that there are other providers, Rose admitted that Cuscal was a dominant player, banking “the majority of this industry.”
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.
Rose emphasized the need for the crypto industry to work collaboratively with regulators and the banking sector. He also suggested the implementation of “sensible licensing” for the industry and urged Australian authorities to act promptly in this regard.
Text source: Coinpedia – Fintech & Cryptocurreny News Media| Cr
