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Australia’s Oldest Bank, Westpac, Takes Aim at Scams with Cryptocurrency Exchange Ban

Westpac, Australia’s oldest bank, has made headlines by announcing a ban on cryptocurrency transactions to certain exchanges as part of a trial to reduce scam losses. The move comes in response to internal data revealing that half of all scam losses stem from investment scams, with one-third of scam payments being transferred to cryptocurrency exchanges.

Investment scams have been identified as the largest portion reported to various Australian agencies, including Scamwatch, ReportCyber, the Australian Financial Crimes Exchange, IDCare, and ASIC.

Westpac’s decision to block transactions to crypto exchanges has the potential to save customers millions of dollars, according to Scott Collary, Westpac Group Executive of Customer Services and Technology.

Collary highlighted that customers often discover they have fallen victim to scams only after the money has left the country, making recovery extremely challenging. By implementing new security measures, the bank aims to protect its customers better, focusing on addressing the devastating impact of investment scams.

Although Westpac did not explicitly mention Binance, it is believed that the ban will affect the exchange. Westpac’s general manager of risk and fraud operations Chris Whittingham, stated that scam proceeds are frequently sent to “high-risk” overseas exchanges.

This announcement comes in the wake of Binance Australia revoking its derivatives trading license and facing an investigation by the Australian Securities and Investments Commission (ASIC) for potentially violating its license by offering derivatives trading to retail Australian traders. Binance Australia recently announced that it could no longer process PayID Australian Dollar deposits due to restricted access imposed by third-party service provider Cuscal.

Furthermore, Binance and its CEO, Changpeng Zhao, are embroiled in a lawsuit filed by the U.S. Commodity Futures Trading Commission (CFTC), alleging that the exchange operates illegally and violates market laws.

Binance has expressed disappointment over the lawsuit and stated that it has cooperated with regulators for the past two years. CFTC Chairman Rostin Benham previously accused Binance of willfully and deliberately breaking market laws by soliciting and offering futures contracts and derivatives to U.S. customers.

The banking industry’s increasing scrutiny of cryptocurrency transactions, driven by concerns over scams and regulatory compliance, continues to impact exchanges such as Binance. As the cryptocurrency landscape evolves, further developments in the regulatory and legal spheres are expected.

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