The Australian Securities and Investments Commission (ASIC) has canceled the license of Binance Australia Derivatives after a targeted review of Binance’s operations in the country.
“ASIC has today canceled the Australian financial services license held by Oztures Trading Pty Ltd trading as Binance Australia Derivatives,” the securities regulator stated in the official announcement on April 6.
Following the license cancellation, Binance Australia Derivatives clients will not be able to increase derivatives positions or open new positions with the platform from April 14. The company will also require users to close any existing derivatives positions before April 21, as Binance is expected to close any remaining open positions on that day.
“The terms of the cancellation include a provision that the cancellation has no effect on the requirement for Binance to continue as a member of the Australian Financial Complaints Authority until the end of April 8, 2024,” the statement said.
The Australian securities regulator went on to say that it has been conducting a targeted review of Binance’s financial services business in Australia, including its classification of retail and wholesale clients. According to ASIC chair Joe Longo, the review was related to compliance with the classification of retail and wholesale clients. The official said:
“Retail clients trading in crypto derivatives are afforded important rights and consumer protections under financial services laws in Australia, including access to external dispute resolution through the Australian Financial Complaints Authority.”
In the statement, ASIC mentioned that the global Binance exchange and its CEO, Changpeng “CZ” Zhao, are currently facing a lawsuit from the United States Commodity Futures Trading Commission. The regulator also noted that various Binance group entities had been subject to other regulatory warnings and action worldwide, referring to a series of warnings and investigations initiated by global regulators against Binance in 2021.
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Following recent engagement with ASIC, Binance has chosen to pursue a “more focused approach” in Australia by closing down Binance Australia Derivatives, a spokesperson for Binance told Cointelegraph. The representative emphasized that spot trading on Binance will still be available for Australian residents, stating:
“Australians can continue to enjoy the use of our spot exchange product. There are a small number of remaining users on Binance Australia Derivatives, approximately 100, and we have reached out to notify them of the winding down process.”
The news comes after Binance Australia Derivatives sent abrupt notifications to its users in late February, saying it was starting to close certain derivatives positions and accounts. The firm cited investor classification compliance, reportedly claiming that it was restricting users that didn’t meet the requirements to be wholesale investors. Local regulators subsequently launched an investigation, aiming to conduct a “targeted review” of Binance’s local derivatives operations.
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Source: https://cointelegraph.com/news/binance-australia-derivatives-license-canceled-by-securities-regulator