Australian Binance’s License – The derivatives license of Binance, a cryptocurrency trading platform that has been providing derivatives services in Australia since July 2022, has been revoked by the Australian Securities and Investment Authority (ASIC).
ASIC has determined that there are valid reasons to revoke the exchange’s derivatives license after considering its way of business. The platform won’t be able to conduct its derivatives-based digital currency operations in the nation as a result. Incidentally, the license cancellation went into force as a result of a request for cancellation that was received by Binance yesterday.
ASIC Cancels Binance’s Derivative License
All platform derivatives transactions must end by April 14 at the latest, according to ASIC. Moreover, traders in derivatives are anticipated to close all positions held before April 21. The exchange’s derivatives license was terminated immediately after this order.
Binance Australia has long been a member of the Australian Financial Complaints Authority (AFCA), the nation’s financial regulatory body. Significantly, the commission stated unequivocally that it would not oust the exchange from its status as an AFCA member. Until April 4, 2024, this injunction will be in effect, according to a statement from ASIC.
According to information from the Australian Securities and Investment Commission, the agency has been examining the country’s exchange’s financial activities. It highlighted some of the focus areas, such as the methods for separating wholesale clients from retail clients.
The study, according to ASIC Chair Joe Longo, intended to safeguard wholesale and retail customers who have significant legal rights under the nation’s financial services regulations. The commission’s main issue is that Binance Global and its CEO, Changpeng Zhao, have run into some problems with the law in recent years.
Also, the business is now engaged in litigation with the US Commodities Futures Trading Commission (CFTC). He also cited the inquiries and cautions issued by some other regulators over the exchange, particularly in 2021.
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Binance License Terminated Due to Derivatives Account Closure
The Binance platform’s derivative area primarily enables investors and dealers to exchange various cryptocurrencies. Users are cautioned to use caution to prevent money loss.
The commission’s conclusion may have been prompted by the alerts Binance delivered to its users at the end of February 2023, at the same time. Binance notified its users that it would begin canceling some positions and accounts in derivatives.
The exchange stated that investor classification compliance was the basis for this decision. It was designed to keep out investors and users who couldn’t qualify as wholesale investors. Local regulators were later made aware of this conduct, and they immediately began stringent inquiries into the exchange’s derivatives operations.
With ASIC’s action, Binance has decided to shift its focus to other operations and services, abandoning the Binance Australia Derivatives. Nonetheless, for the time being, the exchange will continue to offer spot trading on the platform to Australian citizens.