- Binance Australia faced a sudden debanking in May with less than a day’s notice from its payment partner Zepto, impacting about a million customers, according to regional manager Ben Rose.
- Despite these challenges, Binance Australia is still operational, with customers using alternate methods for transactions.
In the early hours of a regular day, the Binance Australia team received an abrupt notice that they would be ‘disconnected’ from Australia’s banking system. Ben Rose, the regional manager, noted that they received no previous warning, consultation, or avenue for recourse from the exchange’s banking partner.
On May 18, Binance Australia announced the suspension of its dollar services. Its payment provider, Zepto, had been instructed to discontinue support for Binance by Cuscal, Zepto’s banking and payments partner. This sudden debanking affected nearly a million customers, predominantly based in Australia.
“The reasons given were not entirely clear and didn’t look that great in the media,”
said Rose, referring to the cryptic justification alluding to crypto-related
“scams and fraud.”
The vague nature of this information initially caused concern among Binance customers, but as it emerged that the wider local crypto industry was also affected by these banking changes, perspectives shifted.
On the same day Cuscal discontinued its services to Binance, Westpac, one of Australia’s Big Four banks, announced that it would begin trials to block payments to crypto exchanges. Shortly after, the Commonwealth Bank, another significant Australian bank, initiated similar crypto-related payment blocks.
Regarding Binance Australia’s ongoing search for an alternate third-party payments provider, Rose remained tight-lipped, stating only that discussions were in progress. He acknowledged the industry’s dependence on Cuscal, stating it banks the
“majority of this industry.”
Despite these challenges, Rose noted that losing access to their banking partner has not had a substantial impact on Binance Australia’s operations. Customers are resorting to other methods of transactions, including purchases and deposits to bank cards, which remain supported on the platform.
Highlighting the importance of working in conjunction with regulators and the banking sector, Rose pointed to the potential benefits of sensible licensing for the industry. In his view, Australia must act swiftly in its approach to cryptocurrency regulations, citing the risk of being left behind as other jurisdictions globally push forward with progressive crypto policies.
