Industry Backlash: Cuscal's Banking Crackdown on Crypto Exchanges

Industry Backlash: Cuscal's Banking Crackdown on Crypto Exchanges
In a recent development, payment provider Cuscal, in partnership with Zepto, has introduced new banking restrictions specifically targeting cryptocurrency exchanges in Australia. This move has garnered criticism from Blockchain Australia, the country's industry body responsible for blockchain technology.

The situation unfolded last month when Cuscal terminated payment services to Binance Australia. In response, Binance Australia expressed their inability to facilitate Australian Dollar bank transfers using PayID, indirectly attributing the issue to Cuscal. 

These actions by local banks to restrict crypto payments have been strongly condemned by Australia's blockchain industry. As a result, Blockchain Australia has invited relevant stakeholders, including Cuscal and government representatives, to participate in a roundtable discussion scheduled for June 27 to address this matter.

According to a communication from Zepto, acting on behalf of Cuscal, the new guidelines for merchants encompass various requirements that must be met by digital currency exchanges supported by Cuscal. They offer a reasonable timeframe for implementation, but emphasize that failure to comply with the new guidelines will result in the withdrawal of support from Zepto and Cuscal.

The survey conducted by Zepto highlights the need for appropriate controls to combat fraud and protect users of these services. It sets a deadline of June 21 for exchanges to respond, stating that certain measures will be implemented. These measures include a mandatory 24-hour hold on first-time inbound payments, real-time verification of user identity, and undisclosed transaction limits on cryptocurrency exchange payments, as reported by Blockchain Australia.

Blockchain Australia's statement questions the selective nature of these new requirements, which exclusively target digital currency exchanges. The organization emphasizes its support for efforts aimed at enhancing secure digital transactions while preserving individuals' freedom to spend their money and utilize their assets as they see fit.

The exact number of Australian exchanges utilizing payment services from Cuscal and Zepto remains undisclosed, making it difficult to gauge the full impact of these restrictions. However, it is worth noting that around 400 crypto exchanges in Australia are registered to comply with anti-money laundering and counter-terrorism financing obligations.

Blockchain Australia Chair and Digital Assets Lawyer, Michael Bacina, has voiced concerns over the far-reaching consequences of this move. He believes that as economic uncertainty grows, instances of scams and fraud are expected to rise. While Australians expect businesses to contribute to addressing this issue, they also value the freedom to make decisions regarding their own money and assets, without undue restrictions.

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