Australian big four bank Westpac has banned its customers from transacting with Binance, as part of a suite of scam protection measures. The development comes amidst mounting pressure on the crypto giant’s operations in the country.
In a statement, Westpac revealed that it was blocking a number of cryptocurrency exchanges as part of a trial. Its data uncovered investment frauds accounted for about half of all such losses, and a third of all scam payments were transferred directly to cryptocurrency exchanges.
Despite not naming Binance explicitly, it is understood its Australian arm exchange has been hit with the ban. Commenting on the move Scott Collary, Westpac’s group executive of customer services and technology, said,
“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. The trial of our new security measures will better protect customers from scams.”
Collary also said the move could help the bank save millions lost to scams. The ban on crypto exchanges is reported to be rolled out as a phased trial in the coming weeks.
Binance Australia being kicked off by a major Australian payments service is yet another blow for the crypto exchange, which has already been facing severe regulatory scrutiny in the United States.
The Westpac ban comes on the same day that Binance Australia issued an update saying it will no longer be able to facilitate Australian Dollar bank transfers via PayID, a popular instant payment method. The crypto exchange blamed its third-party payment service provider while adding it’s looking for an alternative.
Last month, Binance announced the shutting down of Binance Australia Derivatives business, citing the recent engagement with the Australian Securities and Investments Commission (ASIC). The latter had canceled the Australian financial services license held by Oztures Trading Pty Ltd trading as Binance Australia Derivatives in response to Binance requesting the action.
Prior to the license cancellation, the ASIC had also found that Binance incorrectly classified hundreds of retail customers as wholesale investors, which prompted the financial regulator to conduct a targetted review of the company.