In an unexpected turn of events, the Binance Australia team received sudden notification in the middle of the night that they would no longer have ties with the Australian banking system. According to the regional manager of the exchange, there was no prior warning, consultation, or opportunity for remediation. The suspension of Binance Australia's USD services was announced on May 18, following instructions to its payment provider, Zepto, to cease support for Binance from partner banks and payment provider Cuscal. This development impacted approximately 1 million customers in Australia, as revealed by Binance country manager Ben Rose during Australia Blockchain Week.
The banking services of Binance Australia were abruptly cut off with a 24-hour notice, which was later reduced to just 12 hours. Ross, the country manager, expressed that the reasons behind this action were not entirely clear and created negative media coverage. How ever , the situation took a different tone when it became apparent that the broader local cryptocurrency industry was also affected by these banking changes. On the same day that Cuscal terminated its relationship with Binance, Westpac, one of the major Australian banks, announ ced its intention to block payments to cryptocurrency exchanges. Shortly thereafter, the Commonwealth Bank, another prominent Australian bank, implemented a similar restriction on cryptocurrency-related payments.
Ross retrained from providing further details about Binance Australia's search for an alternative third-party payment provider, as discussions are still ongoing. He acknowledged the existence of other providers but noted that Cuscal significantly supports much of the industry. The crypto industry in Australia has heavily relied on crypto-friendly payment providers such as Monoova, Zai, and Zepto, which access the local banking system through partnerships with Cuscal. Binance's peer crypto exchanges, including BTC Markets, Kraken Australia, CoinJar, Independent Reserve, and numerous other crypto-related fintech companies, utilize Cuscal-powered payment channels. The loss of this banking partner has had a tangible impact on Binance Australia's operations, as stated by Ross.
Ross emphasized the importance of collaborating with regulators and the banking industry while also considering the potential implementation of reasonable licensing measures for the crypto industry. He called upon Australia to take prompt action, as other jurisdictions worldwide are already moving forward in this regard. Australia has a unique opportunity, but there is also a risk if necessary permits are not obtained quickly. Although Binance Australia experienced a slight decline in user numbers and engagement following the disruption, it was not deemed significant.
