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Binance said users are still able to buy and sell using debit and credit cards, and that for now Australian dollar withdrawals are available. Image Credit: REUTERS

Sydney: The Australian arm of crypto exchange Binance suffered a setback on Thursday after the local platform lost access to some Aussie dollar deposit services and warned of disruption to bank transfer withdrawals.

Binance Australia tweeted it can no longer offer so-called PayID deposits due to steps taken by a third-party payment provider. A spokesperson said Aussie dollar deposits via bank transfers are no longer available to Binance users in Australia and that bank transfer withdrawals will also be affected.

“We are working hard to find an alternative provider to continue offering AUD deposits and withdrawals to our users,” Binance Australia said.

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Also on Thursday, Westpac Banking Corp. - one of Australia’s largest financial institutions - said it had “begun trialling new customer protections for some cryptocurrency payments to reduce scam losses.”

“Digital exchanges have a legitimate role to play in the financial ecosystem,” Scott Collary, group executive customer services and technology at Westpac, said in a statement. “But since the rise of digital currency, we’ve noticed that scammers are increasingly using overseas exchanges.”

Westpac didn’t immediately respond to a request to clarify whether it has banned transactions involving Binance.

Web of probes

Binance is the largest exchange in the controversial digital-asset sector. Its global business and a US platform are the subject of a web of probes. In April, the Australian Securities and Investments Commission canceled Binance’s license for its derivatives business in the country as it conducts a review of the group’s local operations.

The US Commodity Futures Trading Commission earlier this year sued Binance and its CEO Changpeng “CZ” Zhao for allegedly violating derivatives regulations and accused the firm of having “sham” compliance procedures. Binance has called the lawsuit “unexpected and disappointing.”

Access to banking has been a perennial difficulty for crypto firms. The challenge intensified this year amid heightened regulatory scrutiny after 2022’s digital-asset rout and a series of bankruptcies and scandals, most notably the collapse of the FTX exchange.

In the latest developments in Australia, other digital-asset platforms haven’t so far reported a loss of access to local currency payment rails.