Westpac Blocks Payments To Binance

Twitter icon  •  Published 1 year ago  •  Nikolas Sargeant

To reduce scams, banks have stopped allowing customers to make payments to cryptocurrency exchanges

Westpac has implemented a ban on customers sending funds to Binance - the largest cryptocurrency exchange globally. The decision was taken to mitigate financial losses related to fraudulent activities.

On Thursday, an Australian big four bank announced it will block some cryptocurrency exchanges during a trial period. The decision was made after the bank's data showed that investment scams accounted for half of all scam losses. The data also revealed that one-third of all scam payments were directly transferred to cryptocurrency exchanges.

The bank did not reveal the name of the exchange that has been banned, but it is believed to be Binance. Westpac's customer services and technology executive, Scott Collary, explained that the ban is intended to prevent millions of dollars from being lost to scams.

Collary acknowledges that digital exchanges are a valid part of the financial system. However, he notes that with the emergence of digital currency, scammers are using overseas exchanges more frequently. Unfortunately, customers may only realize after the fact that they have been scammed, making recovery efforts challenging.

Westpac will implement a trial phase of blocking exchanges in the upcoming weeks. Binance has recently announced that it can no longer accept PayID payments in Australian dollars. They cited a decision made by their third-party payment provider and are currently working on finding an alternative provider to continue offering AUD deposits and withdrawals.

Binance's Australian financial services license to sell derivatives has been canceled by the Australian Securities and Investments Commission (ASIC). The cancellation happened a month after ASIC found Binance had wrongly classified many retail customers as wholesale investors.

In March, the US commodity markets regulator sued Binance and its CEO, Changpeng Zhao. The lawsuit claims that the company evaded US law on purpose. The complaint also alleges that Binance continued to operate in the US, despite declaring that it would block US customers from using the platform.

Binance faces allegations that it facilitated illegal activity on its platform and used loopholes to bypass Know Your Customer rules. A spokesperson for Binance expressed surprise and disappointment at the regulatory actions taken against the company. The spokesperson added that Binance had made substantial investments over the past few years to prevent US users from accessing its platform.

In April, Scamwatch reported that investment scams were the most common type of scam reported to various organizations, including ReportCyber, the Australian Financial Crimes Exchange, IDCare, and Asic.

Reports of financial scams reached over 500,000, with losses exceeding $3.1 billion. Investment scams made up $1.5 billion of these losses. Bank transfers were the most common payment method, with 13,098 reports accounting for $210.4 million of losses. However, an increasing number of people, 3,910, reported using cryptocurrency as a payment method. This is a 162.4% increase from previous reports, resulting in a total loss of $221.3 million.

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Nikolas Sargeant

Nik is a content and public relations specialist with an ever-growing interest in Crypto. He has been published on several leading Crypto and blockchain based news sites. He is currently based in Spain, but hails from the Pacific Northwest in the US.