Key points to remember
- Binance Australia has suspended PayID and bank deposits and withdrawals in Australian dollars due to a third-party payment provider.
- Third-party platform Cuscal said Binance failed to meet the platform’s compliance rules.
- Binance Australia still operates debit or credit on its peer-to-peer marketplace.
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Binance Australia, a subsidiary of one of the largest cryptocurrency exchanges in the industry, has announced that it will suspend Australian dollar deposits and withdrawals via PayID and bank deposits for Australian users. The company cited a decision by a third-party payment partner as the reason for the sudden disruption, but it does not affect credit or debit card transactions in the peer-to-peer market.
In an email, Binance Australia said it was working hard to find another provider to continue offering deposits and withdrawals in AUD. The company also noted that credit and debit card purchases were still operational in its peer-to-peer marketplace. Binance further posted the news on Twitter:
Financial friends,
We regret to inform you that with immediate effect, we are unable to facilitate PayID AUD deposits for Binance users due to a decision by our third-party payment service provider. We understand from our third party payment service provider that the Bank…
— Binance Australia (@Binance_AUS) May 18, 2023
The third-party company, Cuscal, said that Binance failed to meet its strict compliance requirements in an effort to reduce scams and fraud, further telling the Sydney Morning Herald that “Cuscal has strict due diligence, onboarding and compliance requirements for our customers and all of their customers and/or merchants… Cuscal has terminated and will continue to terminate any Customers or their Customers and/or Merchants who do not meet our strict requirements.
Binance has not yet indicated when it plans to resume offering PayID and bank deposits.
The decision to suspend PayID and bank deposits follows a series of setbacks for Binance Australia. In March, the Australian Securities and Investments Commission (ASIC) canceled Binance Australia Derivatives License after a request from the company itself due to the Commission’s launch of a “targeted review” of Binance, according at Reuters.
Binance CEO Changpeng “CZ” Zhao took to Twitter to further explain the cancellation:
There is misinformation (and confusion) about #binance Australia.@Binance_AUS yesterday requested the cancellation of the derivatives license. The platform had exactly 104 users yesterday.@Binance_AUS WILL CONTINUE to operate the UA spot exchange. 🙏 pic.twitter.com/nEExtG4U90
— CZ 🔶 Binance (@cz_binance) April 6, 2023
Binance’s Misfortunes
This latest setback for Binance comes at a time when the exchange is under increased scrutiny from regulators around the world.
In the United States, the New York The state Department of Financial Services has ordered Paxos, the company that mints BUSD and other stablecoins, to stop minting Binance USD (BUSD) from February 21, 2023. Although the reason for this decision is still unknown, the Wall Street Journal believes that it could be because the SEC is seeking to sue Paxos for creating unregistered securities.
CZ said on Twitter that while Binance does not support the decision, they will stop using BUSD for transactions:
7/ Binance will continue to support BUSD for the foreseeable future. We expect users to migrate to other stablecoins over time. And we will make product adjustments accordingly. for example, abandoning the use of BUSD as the main pair for trading, etc.
— CZ 🔶 Binance (@cz_binance) February 13, 2023
Meanwhile, Binance deceased of Canada amid Canadian regulators tightening their crypto regulations. CZ tweeted, “We had high hopes for the rest of the Canadian blockchain industry. Unfortunately, new stablecoin guidelines and investor limits provided to crypto exchanges make the Canadian market more tenable for Binance at this time.