Binance Australia, the world’s largest crypto exchange, is blaming third-party service providers for issues wherein some of their customers were unable to deposit or withdraw money after the service providers reportedly cut off their services.
The exchange on Thursday said that it would no longer clear the way for Australian Dollar bank transfers using PayID and is desperately trying to figure out a viable alternative to prevent its customers from facing the issue caused by cutting off services provided by third parties. Despite the challenges faced by crypto exchanges in maintaining fiat on-ramps, Binance assures that its P2P marketplace remains fully functional, allowing users in Australia to conveniently purchase and sell cryptocurrencies using their credit or debit cards.
Crypto.com, one of Binance’s top rivals, is currently facing a very similar banking crisis wherein its ability to facilitate US dollar deposits was threatened. The situation arose from several factors including the collapse of Silvergate Bank, the exit of Metropolitan Commercial Bank from the crypto market and the freezing of Euro accounts held by former partner Transactive Systems. These circumstances pose a significant threat to Crypto.com’s liquidity.
A large number of Crypto.com users tend to rely on deposits made through debit and credit cards. Even though this method proves to be costly since charges applied by banks on deposits and withdrawals are hefty, people have no other choice but to rely on it since it is the sole means for any transaction.
In response to Binance Australia mistakenly categorizing 500 users as “wholesale investors,” which resulted in the closure of their derivative positions, the Australian Securities and Investments Commission (ASIC) is conducting a review of Binance Australia’s derivatives business. This action is taken due to local regulations that prohibit such closures for retail traders.