The Australian Securities and Investments Commission (ASIC) revealed today that it would be invalidating Binance Australia’s derivatives business license after conducting a targeted review of Binance’s operations within the country.
“ASIC has today canceled the Australian financial services license held by Oztures Trading Pty Ltd trading as Binance Australia Derivatives,” the securities watchdog said in a press release.
Binance Australia is the specific entity, and the license allowed it to offer over-the-counter derivative products to customers in Australia.
Binance Australia clients will not be able to increase their derivatives positions or open new positions with the platform from April 14 following the license revocation. The company has been ordered by the regulator to close all open derivatives positions by April 21.
The official announcement further noted that ASIC had been conducting a targeted review of Binance’s financial services businesses in Australia since February. This includes the company’s classification of retail and wholesale customers.
“It is critically important that AFS licensees classify retail and wholesale clients in accordance with the law. 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,” ASIC Chair Joe Longo stated.
It’s worth noting that the license cancellation includes a condition that the move does not affect the requirement for Binance to remain a member of the Australian Financial Complaints Authority until the end of April 8, 2024.
Most importantly, the license nullification comes just a day after the digital asset exchange requested the action, as indicated in the ASIC announcement.
Binance Australia said it was closing down its derivatives product to “pursue a more focused approach” after a recent engagement with the Australian Securities & Investments Commission, the company’s representative said in an email. The spokesperson stressed that its spot trading exchange will still be available for Binance’s Australian users.
Binance’s Regulatory Troubles
The move comes as Binance has found itself in the crosshairs of the Commodity Futures Trading Commission (CFTC). The United States regulator accuses the crypto giant of offering unlicensed crypto derivatives products and directing American customers to evade compliance controls via the use of VPNs. The CFTC action joins a series of similar moves from the SEC, the DOJ, and the IRS.
A rumor also surfaced earlier this week claiming that Binance CEO Changpeng Zhao was facing an international law enforcement request to arrest him — something the exchange blatantly denied.
Binance remains the world’s largest cryptocurrency exchange in daily trading volume.