Bitcoin Price Plunges on Binance Australia
Bitcoin prices on Binance Australia, a branch of the world's leading cryptocurrency exchange, fell to a 20% discount compared to other exchanges on Tuesday. The incident points towards users trying to hastily liquidate their holdings.
Comparing Bitcoin Prices on Various Platforms
The cryptocurrency giant, bitcoin, was trading at about A$34,000 ($23,062) on Binance Australia. This price contrasts with A$43,000 on BTC Markets, an Australia-based cryptocurrency exchange. On platforms like Bitstamp, bitcoin was trading at around $27,790 outside Australia.
Liquidity Issues Following Fiat On-ramp Service Termination
A Binance spokesperson explained the price discrepancy, attributing it to their payment processor's banking partner's recent suspension of fiat on-ramp services. The upcoming closure of off-ramp services on June 1 prompted some Australian users to withdraw their AUD holdings in advance. This resulted in reduced liquidity and affected pricing for AUD pairs. The spokesperson also mentioned that the remaining AUD pairs would be delisted in line with the fiat off-ramp service closure.
Binance Australia's Troubled Times
Earlier this month, Binance Australia announced that some of its customers would only be able to deposit or withdraw money after the cessation of services by a third-party provider. In April, amidst a regulatory probe, the company stated it would shut down its Australian derivatives business after surrendering its financial services license.
Global Regulatory Challenges for Binance
Binance, accounting for nearly 70% of global cryptocurrency trading, has confronted lawsuits and investigations worldwide. Initially operating exclusively with cryptocurrency allowed Binance to circumvent the international banking system. However, the need for conventional banking services grew as the company expanded its customer base and workforce.
Binance's Struggles with Conventional Banks
Binance had been utilizing services from Silvergate Bank, a U.S. lender that collapsed in March. During the same month, New York's top financial regulator took control of another crypto-friendly bank, Signature Bank (OTC: SBNY), where Binance also held an account. According to Reuters, Binance's attempts to secure bank accounts for its smaller entities have seen limited success, as most major banks have rejected the exchange due to compliance concerns surrounding the source of funds for crypto companies.