at recent days advertisementWestpac, Australia’s oldest bank, has revealed its decision to implement a transaction ban on all activities involving Binance, the popular cryptocurrency trading platform. With a focus on protecting investors, WestPac aims to protect its customers from potential scams and fraudulent schemes, as stated in its official press release.
To confirm this, the Australian division of Binance also announced that certain clients will face restrictions on their ability to deposit or withdraw funds. This restriction arose due to a third party service provider’s termination of services.
Binance took to social media to announce that users will no longer be able to deposit Australian dollars via bank transfers due to payments provider Cuscal’s actions, effective immediately.
In addition, Binance indicated that withdrawals will be temporarily suspended without providing specific information on the timeline for the appeal.
Westpac has previously maintained a crypto-friendly stance and justified the move by highlighting some of its findings. It revealed that accounts linked to investments are particularly vulnerable to fraud, and that a third of all worrying payment transactions are funneled directly to cryptocurrency exchanges.
Scott Colari, Westpac Group Chief Executive Officer, Customer Services and Technology, said:
Digital exchanges have a legitimate role to play in the financial ecosystem. But since the advent of digital currency, we have noticed that scammers are increasingly using offshore exchanges. Our clients often only find out they’ve been scammed after the money has left the country, which makes recovery very difficult.
A setback for cryptocurrency exchanges in Australia
Alongside Westpac’s ban, there have been warnings from the Australian Securities and Investments Commission (ASIC) about fraudulent activities, reflecting an increased and concerted effort by Westpac to combat exploitation more broadly.
The bank’s securities team has demonstrated a significant detection rate of up to 60% for fraud attempts, and Westpac is exploring system upgrades to further enhance these capabilities.
After confirming that it has implemented measures to block certain cryptocurrency payments to mitigate losses from scams, Westpac did not disclose specific details or identify the exchanges involved.
This development marks another setback for Binance’s Australian operations after it relinquished its financial services license in April amid an ongoing regulatory investigation.
The combination of regulatory scrutiny and recent restrictions on payments add to the challenges Binance faces in the Australian market. This move by WestPac to block transactions with Binance could greatly affect other exchanges operating in Australia.
With Binance already having a tense relationship with ASIC in the past, this serves as a strong cautionary message to the exchange and other prominent crypto service providers in the country. Cryptocurrency exchanges will now need to reassess their business strategies to ensure their sustainability in the future.
Featured image from UnSplash, chart from TradingView.com