What will Binance Australia services look like after debanking?

Binance users in Australia now have a narrowed pool of options to purchase cryptocurrencies amid the ongoing global debanking of crypto businesses. Since 5:00 p.m. local time on June 1, fiat on-ramps and off-ramps by bank transfers have been halted in Australia. The suspension includes trading for Australian dollar (AUD) pairs. 

The shutdown of deposits and withdrawals is tied to previous developments impacting Binance in Australia. In February, Binance’s local derivatives arm abruptly notified its users that certain positions and accounts would be closed for those who didn’t meet the requirements to be considered wholesale investors.

Fellow Binancians,

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

Under the law, a wholesale investor is an experienced investor with the capital to invest in high-quality assets, which usually entails higher risks. This type of investor may also be called an institutional or accredited investor. To be classified as a wholesale investor in Australia, one should have net assets of at least $2.5 million or an annual gross income of at least $250,000.

After Binance winded down non-compliant accounts, local regulators launched a “targeted review” of the exchange’s local derivatives operations. On April 6, the Australian securities regulator canceled the Binance Australia Derivatives license.

A few weeks later, in May, Binance Australia announced it had suspended AUD services after its local payment services provider Zepto was instructed to do so, ceasing all deposits and bank transfer withdrawals.

At that time, a spokesperson from Zepto told Cointelegraph that its partner Cuscal instructed the company to “offboard Binance.” In a separate statement, Cuscal said it was only “protecting Australians from financial crimes and scams.”

Since then, Binance Australia has been seeking a payment provider. In the United States, Binance.US faced a similar challenge as former partners Silvergate and Signature Bank were shut down amid the banking crisis earlier this year.

“We are working hard to find an alternative provider to continue offering AUD deposits and withdrawals to our users,” a spokesperson from Binance told Cointelegraph in a statement, adding that users in the country can still buy and sell crypto using credit or debit cards and peer-to-peer trading continues to operate as usual. Additionally, AUD balances remaining in accounts have been converted to Tether (USDT).

The ongoing cross-border debanking of crypto firms has prompted Binance CEO Changpeng “CZ” Zhao to consider buying a bank, he revealed during an interview.

Although some have warned risks still exist, Australian-based cryptocurrency exchanges have lined up to mitigate contagion fears following the recent events. “That is reflective of the regulatory environment that we operate in or in this case, the absence of a regulatory environment,” noted BTC Markets CEO Caroline Bowler.

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