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In the middle of the night, the Binance Australia team was suddenly told that it would be “cut off” from the Australian banking system. According to the exchange’s regional manager, Ben Rose, there was no prior warning, consultation, or redress.
On May 18, Binance Australian announced the suspension of its USD services after its payment provider Zepto was ordered to stop supporting Binance from Cuscal, Zepto’s partner banking and payment provider.
On June 26, Rose told an audience at Australian Blockchain Week that the move affected about 1 million customers in Australia.
“We received a 24-hour debanking notice at 11:30 p.m., which later turned into a 12-hour notice, and so we were banked off.”
“The reasons given were not entirely clear and did not look good in the media,” Rose said. Previously, a Cuscal spokesperson declined to comment on Binance Australia-related issues to Cointelegraph, but pointed to “scams and scams” related to cryptocurrencies.
Initially, the limited information worried Binance customers, but “that tone changed rather quickly” when it became clear that these banking changes were impacting the wider local crypto industry,” Rose said.
The same day that Kuskal fired Binance, Big Four bank Westpac said it would begin trials blocking payments on cryptocurrency exchanges. Less than a month later, Commonwealth Bank, another major Australian bank, launched similar cryptocurrency-related payment blocks.
Speaking to Cointelegraph following his on-stage interview, Rose declined to provide any further details about Binance Australia’s search for an alternative third-party payment provider as discussions continued.
Rose said there are other suppliers, but acknowledged that Cuscal is “banking a lot of this industry.”
The Australian crypto industry has long relied on crypto-friendly payment processors including Monoova, Zai and Zepto – all partnering with Cuscal to access the local banking system.
Cuscal-backed payment rails are used by Binance’s cryptocurrency exchanges, including BTC Markets, Kraken Australia, CoinJar, Independent Reserve, and many other cryptocurrency-related fintech firms.
Related: Don’t Follow the US: Blockchain CEO Aus Hammers ‘Enforcement Regulation’
On stage, Rose stated that the loss of access to their banking partner “didn’t have a real impact on the business.” He added that Binance users are “using other methods”, likely purchases and bank card deposits, which are still supported on the platform.
He stressed the need to work with regulators and the banking sector, as well as the possibility of introducing “smart licensing” for the industry.
“We urge Australia to act relatively quickly because jurisdictions around the world are now moving forward,” Rose said.
“We have a window as a country and we think there is an opportunity, but there is also a risk if we don’t move towards licensing relatively quickly.”
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