The Australian Securities and Investments Commission (ASIC) has canceled Binance’s Australian derivatives license following a targeted review of Binance’s operations in the country.
“ASIC today canceled the Australian financial services license held by Oztures Trading Pty Ltd to trade as Binance Australia Derivatives,” the securities regulator said in an official announcement on April 6. Following the cancellation of the license, Binance Australia derivatives customers will not be able to increase derivatives positions or open new positions through the platform from April 14. The firm will also ask users to close any existing derivatives positions by April 21, as Binance expects to close any remaining open positions on that day.
“The terms of the cancellation included a provision that the cancellation had no effect on Binance’s requirement to continue as a member of AFCA until 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 chairman Joe Longo, the review relates to compliance with retail and wholesale customer classifications. The official said: "Retail customers trading cryptocurrency derivatives have important rights and consumer protections under the Australian Financial Services Act, including access to external dispute resolution through the Australian Financial Complaints Authority."
In its statement, ASIC mentioned that the global Binance exchange and its CEO Changpeng Zhao “CZ” are currently facing lawsuits from the U.S. Commodity Futures Trading Commission. The regulator also noted that various Binance Group entities have received other regulatory warnings and actions around the world, referencing a series of warnings and investigations launched against Binance by global regulators in 2021.
A Binance spokesperson told Cointelegraph that after its recent engagement with ASIC, Binance chose to pursue a “more targeted approach” in Australia by shutting down Binance Australia Derivatives. The representative emphasized that Australian residents can still conduct spot trading on Binance, stating: “Australians can continue to use our spot exchange product. There are a small number of remaining users on Binance Australia Derivatives, about 100, and we have contacted them to inform them of the closure process.”
The news comes after Binance Australia Derivatives issued a surprise notice to its users in late February that it would begin closing certain derivatives positions and accounts. Citing investor classification compliance, the company reportedly claimed it restricted users who did not meet wholesale investor requirements. The local regulator subsequently launched an investigation aimed at conducting a "targeted review" of Binance's local derivatives business.
