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- Binance has confirmed that it has been cut off from the Australian banking system with its 1 million customers affected.
- On top of getting short notice, the reasons given to the crypto exchange were not entirely clear.
Binance has been dealt a major blow in Australia with the biggest crypto exchange by trading volume being cut off from the banking system. Binance regional manager Ben Rose has revealed that there was no prior warning, consultation, or fix with the closure coming overnight.
The closure comes as no surprise with Binance coming under global regulatory scrutiny over the last couple of weeks. The most highlighted case is the U.S Securities Exchange Commission which brought charges against the exchange and its CEO for listing unregistered securities, diverting customer funds as well as operating an illegal exchange ‘Binance.US.’
In the latest on this, a U.S. Judge has rejected Binance.US’s complaint over an SEC press release in which the exchange accused the regulatory agency of “misleading” public statements which could ultimately harm its operations and its trial.
Binance Faces Global Scrutiny
There are reports that the exchange is also under investigation in France for anti-money laundering procedures in addition to advertising its services before being registered with the financial markets regulator. The exchange has further been denied a United Kingdom crypto license recently and was ordered to cease offering any virtual currency services in Belgium.
Read More: Belgium Sets Roadblocks for Binance in Europe, Demands Halt to Operations
According to Rose, the recent move by the banking system in Australia does not seem to target Binance but the entire crypto industry. Speaking at the Australian Blockchain Week on June 26, the manager revealed that the move had impacted around 1 million users based in the region.
We received 24 hours’ notice of debanking at 11:30 pm in the evening, that was later turned into 12 hours, and so we had our banking cut off.
The crypto industry in Australia has partnered with crypto-friendly payments providers like Monoova, Zai, and Zepto which work with Cuscal to access the banking system. On May 18th Zepto was told to stop support for Binance from Cuscal.
Despite some initial concerns from users, Rose has revealed that the latest development has not had a real impact on its business. However, he has called on the government to establish “sensible licensing” for the industry.
We have a window as a country and we think there’s an opportunity, but there’s also a risk if we don’t move on licensing relatively quickly.
Investors are aware that a lot of the recent scrutiny comes in response to the crash of FTX which exposed a lack of clear regulation in the industry. In response, governments are scrambling to show force through a regulation-by-enforcement approach.
Through it all, Binance has insisted that it operates legally and that it is committed to working with local governments to be compliant. But the recent hurdles have dampened its ambition of becoming a global leader.
The silver lining is that the crypto market remains resilient with a majority of top cryptocurrencies holding higher support. This is an indication that global demand especially from traditional investors is still on the rise.
