In their recent announcement, Westpac, the oldest bank in Australia, has revealed its decision to implement a transaction block on all activities involving Binance, the popular cryptocurrency exchange. With a focus on investor protection, WestPac aims to shield its customers from potential scams and fraudulent schemes, as stated in its official Press Release.
To corroborate the same, the Australian division of Binance also announced that specific customers would experience limitations on their ability to deposit or withdraw funds. This restriction arose due to a third-party service provider terminating services.
Binance took to social media to announce that users would no longer be able to deposit Australian dollars via bank transfers due to the actions of payments provider Cuscal, effective immediately.
Additionally, Binance indicated that withdrawals would be temporarily suspended without providing specific information on the timeline for resumption.
Westpac previously had maintained a crypto-friendly stance and justified this move by highlighting some of its findings. It revealed that accounts associated with investments are allegedly particularly vulnerable to scams, and an alarming one-third of all payment transactions are directly routed to crypto exchanges.
Scott Collary, Westpac Group Executive of Customer Services and Technology, stated,
Digital exchanges have a legitimate role to play in the financial ecosystem. But since the rise of digital currency, we’ve noticed that scammers are increasingly using overseas exchanges. Often our customers only discover they’ve been scammed after the money has left the country, making recovery extremely difficult.
Setback For Crypto Exchanges Operating In Australia
Coupled with the ban imposed by Westpac, there have been warnings from the Australian Securities and Investment Commission (ASIC) regarding fraudulent activities, reflecting a heightened and coordinated effort by Westpac to combat exploitation on a broader scale.
The bank’s securities team has demonstrated a significant detection rate of up to 60% for attempted scams, and Westpac is actively exploring system upgrades to enhance these capabilities further.
After confirming that it implemented measures to block certain cryptocurrency payments to minimize losses from scams, Westpac did not disclose specific details or identify the exchanges involved.
This development marks another setback for Binance’s Australian operations following the surrender of its financial services license in April amid an ongoing regulatory investigation.
The combination of regulatory scrutiny and the recent curb on payments adds to the challenges faced by Binance in the Australian market. This move by WestPac to block transactions with Binance could significantly impact other exchanges operating in Australia.
With Binance already having a strained relationship with ASIC in the past, this serves as a strong cautionary message for the exchange and other prominent crypto service providers in the country. The crypto exchanges will now need to reassess their business strategies to ensure their sustainability in the future.