At the request of the exchange itself, the ASIC cancels Binance’s derivatives division in Australia.
Regulatory concerns surrounding Binance’s operations appear to be increasing. In this regard, the main Australian securities regulator announced the cancellation of the derivatives license of the Australian arm of Binance.
As reported via the Key Alerts Telegram group, starting April 14, Binance derivatives clients in Australia “will not be able to open or increase their existing trading positions.” By April 21, Binance will be required “to close the remaining trading positions,” the regulator stated.
Interestingly, the exchange had been under review by the Australian Securities and Investments Commission since February. This happened after Binance acknowledged that a “small number” of clients were trading at a higher level than allowed.
Following the official statement, the license allowed it to create and issue a derivatives market. as well as trading financial products on behalf of another person, and providing financial advice to retail and wholesale users in Australia.
“It is critically important that AFS licensees classify retail and wholesale clients in accordance with the law,” said ASIC Chair Joe Longo.
The Australian Securities and Investments Commission (ASIC) Terminates Binance’s Operating License
The move follows a request from Binance on April 5. The following is highlighted in said request:
“ASIC has today (April 6) canceled the Australian financial services license held by Oztures Trading Pty Ltd trading as Binance Australia Derivatives (Binance). The license cancellation was effected today in response to a request to cancel received from Binance yesterday (April 5).”
Dates to Consider
According to the cancellation terms that have been published, these dates must be taken into account:
- As of April 14, 2023, clients will not be able to increase derivatives positions or open new positions with Binance.
- Binance will require clients to close any existing derivatives positions by April 21, 2023.
- On April 21, 2023, Binance will close the remaining open positions.
The terms of the cancellation include a provision that allows Binance to continue being a member of the Australian Financial Complaints Authority until the end of April 8, 2024.
Warning from the Australian Securities and Investments Commission
In any case, ASIC has repeatedly warned potential crypto users that cryptocurrencies are risky and complex, as they pose additional risks to consumers through leveraged trading.
Many products and crypto services are not regulated by ASIC. Therefore, more than with other types of investments, users of cryptocurrencies must be prepared to lose the funds they invest. Longo explained that “ASIC supports a regulatory framework for crypto with a focus on consumer protection and market integrity. The final decision as to the regulatory settings is one for Government.”
Binance’s Ongoing Commitment
Finally, Binance blogged more details of the process, apologizing for “any inconvenience this may cause and we will be closely monitoring the process to ensure it is as seamless as possible,” reassuring that users will continue “to access and enjoy Binance Australia’s spot trading platform.”
By Audy Castaneda
