Westpac Bans Payments to Binance

One of the four biggest banks in Australia plans to stop payments to Binance crypto exchange due to high risk and to reduce scam losses.

Westpac Bans Payments to Binance

One of the oldest Australian banks – Westpac, announced its ban on May 18th on cryptocurrency transactions to certain exchanges. The motivation for the ban is an attempt to reduce scam losses.

Data from Westpac depicts that half of the scam losses are from investment scams, and one-third of scams are done via payment transactions to cryptocurrency exchanges. Scamwatch of the Australian Competition and Consumer Commission (ACCC) reported last month that the amount of investment scams reported to Scamwatch, ReportCyber, the Australian Financial Crimes Exchange, IDCare, and ASIC, continues to grow larger.

Westpac Group Executive of Customer Services and Technology, Scott Collary, said that restricting transactions to crypto exchanges could potentially save customers millions of dollars. Collary later added:

“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. In particular, it will target investment scams, which have a devastating impact on our customers.”

Westpac’s general manager of risk and fraud, Chris Whittingham, told the Australian Financial Review that the scams' profit is usually sent to “high-risk” overseas exchanges. While the bank did not specify names of exchanges to be restricted, it is believed to include Binance as one of the many exchanges.

Meanwhile, the Binance Australia trading license was canceled last month. Additionally, the Australian Securities and Investments Commission (ASIC) is investigating Binance Australia for potentially violating its license by providing Australian retail traders with derivatives.

In addition to that, Binance Australia announced that it can no longer process PayID deposits in Australian Dollars due to Cuscal, a third-party service provider, restricting access.

Changpeng Zhao, CEO of Binance, and Binance are facing a U.S. lawsuit from the Commodity Futures Trading Commission, which was filed in March, with the alleged claims of Binance violating market laws and operating an illegal exchange.

Upon hearing about the lawsuit, a Binance spokesperson regarded the lawsuit as “unexpected and disappointing,” stating that the exchange had been cooperating with regulations for over two years.

Rostin Benham, Chairman of the Commodity Futures Trading Commission (CFTC), said last month, that Binance consciously broke the market laws by offering futures contracts and derivatives to U.S. customers.

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