Amid the global trend of crypto businesses being debanked, Binance users face limited options for buying crypto in Australia. As of 5:00 pm local time on June 1, fiat on-ramps and off-ramps via bank transfers have been suspended in the country, including trading involving AUD pairs.
The decision to halt deposits and withdrawals is linked to prior developments that have affected Binance’s operations in Australia. In February, Binance’s local derivatives branch unexpectedly informed users that specific positions and accounts would be closed for individuals who did not meet the criteria to be classified as wholesale investors.
According to the law, a wholesale investor in Australia is a knowledgeable investor with sufficient capital to engage in more speculative assets, typically involving higher risks. This kind of investor is also known as an institutional or accredited investor. To be categorised as a wholesale investor in Australia, one must have net assets totalling at least $2.5 million or an annual gross income of at least $250,000.
We regret to inform you that AUD deposits and withdrawals by bank transfer are no longer available to Binance users in Australia. Binance has ceased all AUD trading pairs as of June 1. In order to facilitate withdrawals and trading activities after June 1, you…
— Binance Australia (@Binance_AUS) June 1, 2023
After the closure of non-compliant accounts, local regulators initiated a targeted review of Binance’s derivatives operations in Australia. On April 6, the Australian securities regulator revoked Binance’s Australia Derivatives license. Later, in May, Binance Australia announced the suspension of AUD services after receiving instructions to do so from its payment services provider, Zepto.
Zepto’s spokesperson said their partner, Cuscal, instructed them to “offboard Binance.” Cuscal, in a separate statement, clarified that their actions aimed to protect Australians from financial crimes and scams. Since then, Binance Australia has been actively seeking a new payment provider. Binance.US faced a similar challenge when its former partners, Silvergate and Signature Bank, were affected by the banking crisis earlier this year.
According to a spokesperson from Binance, they are diligently searching for an alternative provider to continue facilitating AUD deposits and withdrawals for their users. Users in the country can still buy and sell cryptocurrencies using credit or debit cards, and peer-to-peer trading remains unaffected. Any remaining AUD balances in user accounts have been converted to Tether.
The global debanking of crypto firms prompted Binance CEO Changpeng “CZ” Zhao to consider acquiring a bank. While risks still exist, Australian-based crypto exchanges have acted to mitigate contagion concerns following these recent events. BTC Markets CEO Caroline Bowler remarked that this situation reflects the regulatory environment, or in this case, the lack of a regulatory environment in which they operate.