- Binance has faced increased difficulty operating in Australia.
- Data shows that crypto assets on the platform are trading at a discount.
- The exchange has blamed reduced AUD liquidity.
The Australian market has evolved to become rugged terrain for Binance, the world’s largest crypto exchange by volume.
Signs of trouble first appeared in April when Binance Australia asked regulators to cancel its derivatives license amid plans for a targeted review from the Australian Financial Complaints Authority (ASIC). In May, the firm further disclosed that it could no longer process Australian Dollar (AUD) deposits and would cease withdrawals after June 1 due to a decision from its payment provider.
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As the deadline approaches, the crypto exchange has again grabbed headlines as data shows that crypto assets such as Bitcoin are now trading at a significant discount on the platform.
Reduced AUD Liquidity
At the time of writing, Bitcoin is trading for AUD $34,400.52 (approximately USD $22,461.98) on Binance Australia, compared to about AUD $42,558.50 (roughly USD $27,788.77) on trading venues like Kraken, per data from CryptoCompare, representing an AUD $8057.98 (an estimated USD $5,259.24) discount. Bitcoin is notably not the only asset affected, as Ethereum is trading at AUD $565 (about USD $368.43) lower on Binance Australia at the time of writing.
In an email to DailyCoin, a Binance spokesperson disclosed that the discounted price resulted from reduced AUD liquidity as users rushed to withdraw assets in AUD before the June 1 deadline.
"AUD pairs have experienced less liquidity which has impacted their pricing. We will be delisting remaining AUD pairs in line with the closure of fiat off-ramp services. We remain focused on securing additional fiat relationships to service our users," the statement read.
While the discounted Bitcoin price on face value appears to provide an attractive arbitrage opportunity, it is worth noting that traders would face difficulties trying to purchase the asset for cheap. For one, Binance Australia has suspended AUD deposits. In addition, traders are forced to pay high fees to convert crypto assets to AUD.
On the Flipside
- Users can still withdraw and deposit crypto assets on Binance Australia after AUD withdrawals are discontinued.
- Binance Australia has asserted that it is actively searching for new banking partners.
Why This Matters
Binance Australia’s woes highlight crypto businesses’ difficulties in establishing banking partnerships as regulatory scrutiny heightens in various jurisdictions.
Read this to learn more about Binance Australia’s brush with regulators:
Binance Australia Loses Derivatives License After ‘Targeted Review’
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