Australia cancels licence for Binance’s derivatives business
THE Australian Securities and Investments Commission has cancelled Binance’s licence for its derivatives business in the country as it conducts a review of the group’s local operations, according to a statement on Thursday (Apr 6).
The group will wind down its derivatives exchange in Australia, while the spot platform will remain open, Binance Australia said in a tweet.
Binance requested the regulator that the Australian financial services licence – held by its local entity Oztures Trading that trades as Binance Australia Derivatives – be cancelled, ASIC said in the statement. Starting on April 14 users will not be able to increase or open new derivatives position with Binance in Australia. By April 21 all existing derivatives positions need to be closed, according to the statement.
ASIC’s “targeted review” of Binance’s Australian business includes its classification of retail and wholesale clients, the regulator said. “It is critically important that AFS licensees classify retail and wholesale clients in accordance with the law,” said ASIC Chair Joe Longo in the statement.
The development comes a week after world’s largest crypto exchange and its founder Changpeng Zhao were sued by the US Commodity Futures Trading Commission alleging that Binance violated a number of its rules, including deliberately allowing Americans to use the platform to buy and sell crypto derivatives despite never registering.
Binance’s group of entities have been subject to regulatory warnings and action by a number of overseas regulators in the past including the UK Financial Conduct Authority, Japan Financial Services Agency and the Monetary Authority of Singapore, ASIC said in its statement.
The Australian regulator has been warning investors about the risks and complexities of crypto, and that many of the products are not regulated.
“Crypto derivatives pose additional risks to consumers through the operation of leverage,” the statement said, adding that the ASIC is conducting targeted review of these matters. BLOOMBERG
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