If you are a crypto enthusiast in Australia, you might have noticed a huge price gap between Binance Australia and other local exchanges. Binance Australia, the local branch of the world’s largest cryptocurrency exchange, has faced some challenges in recent weeks. The platform has lost access to a popular instant payment method called PayID, and has been banned by one of the major Australian banks, Westpac. These developments have affected the ability of Binance Australia users to deposit and withdraw Australian dollars on the exchange.
Bitcoin prices on Binance Australia were at a 20% discount to rival exchanges on May 30, 2023, according to Reuters. This means that customers on Binance Australia were selling their bitcoin at much lower prices than the market average. Why did this happen and what does it mean for the future of crypto in Australia?
As of May 30, 2023, the price of bitcoin on Binance Australia was around A$34,000, compared to around A$43,000 on BTC Markets, a local competitor. Outside Australia, bitcoin was trading at around US$27,790 on other platforms. This means that Binance Australia users were selling their bitcoin at a 20% discount to the market average.
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The main reason behind this phenomenon is that Binance Australia announced earlier this month that some customers will not be able to deposit or withdraw money after a third-party service provider cut off its service. The service provider, Westpac, is one of the major banks in Australia and was providing fiat on-ramp and off-ramp.
According to data from CoinMarketCap, the trading volume of bitcoin on Binance Australia dropped by more than 50% in the last week, indicating a mass exodus of traders from the platform. Some analysts believe that this is a sign of panic selling, as Binance users fear losing access to their funds or facing legal consequences.
According to data from CoinMarketCap, the trading volume of Bitcoin on Binance Australia has dropped by more than 50% since the announcement on May 25. The price of Bitcoin has also fallen by about 10% in the same period, indicating a bearish sentiment among Australian traders.
There are several possible reasons for this trend. One is that they are afraid of losing access to their funds or being unable to withdraw them after the ban takes effect. Another is that they are anticipating a further decline in the value of Bitcoin due to regulatory uncertainty and market volatility. A third reason is that they are looking for alternative platforms or cryptocurrencies to trade with, such as Coinbase, Kraken, or Ethereum.
Whatever the reason, this phenomenon shows that Binance’s regulatory troubles are having a significant impact on its user base and market share. Binance is currently facing legal challenges and restrictions in several countries, including the US, UK, Japan, Germany, and Singapore. These actions have raised questions about Binance’s compliance and transparency standards, as well as its ability to protect its customers’ interests and assets.
This means that Binance Australia users were selling their bitcoin at an 18% discount compared to other Australian platforms, and at a 15% discount compared to the global market. This could indicate a lack of liquidity and confidence in Binance Australia’s services, as well as a desire to exit the platform before it delists several trading pairs with the Australian dollar on June 1.
Binance Australia has attributed the suspension of fiat on-ramp and off-ramp services to a decision made by its third-party payment service provider, Cuscal. The company has also said that it is looking for alternative fiat relationships to serve its users. Meanwhile, users can still buy and sell cryptocurrencies using credit or debit cards on Binance Australia.
Binance Australia is not the only crypto exchange that has faced regulatory hurdles in the country. The Australian Securities and Investments Commission recently revoked its derivatives license after Binance requested the cancellation. Binance is also under investigation by several U.S. government agencies, including the SEC, DOJ, IRS, and CFTC.
Binance has stated that it is working with regulators and authorities to resolve these issues and ensure its continued operation in different jurisdictions. It has also assured its users that their funds are safe and that they can still access them through other channels, such as Binance.com or Binance Smart Chain.