Binance Australia’s derivatives license has been revoked by the Australian Securities and Investments Commission (ASIC) as part of an ongoing “targeted review” of Binance’s businesses in the country, according to a press release issued on Thursday.
The command was given in response to Binance’s own request to cancel the license, following a formal hearing conducted by ASIC to consider whether to revoke it. From April 14 onwards, clients down under won’t be able to increase their derivatives positions or open new ones. Binance Australia has been orderered to close all clients’ open derivatives positions by April 21.
In a prepared statement, ASIC chair Joe Longo said, “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.
“Our targeted review of these matters is ongoing, including focus on the extent of consumer harms,” said Longo.
Binance Australia reportedly has over one million users, according to its former chief exec Leigh Travers, who stepped down from his role in March.
Binance attempts positive spin on Australia probe
In a statement, Binance marketed ASIC’s regulatory scrutiny in typical fashion. “Following recent engagement with ASIC, Binance has decided to pursue a more focused approach in Australia by winding down the Binance Australia Derivatives business,” it said.
“Binance’s more focused approach in Australia will continue building on the locally registered spot exchange (operated by Binance Australia). Local users can continue to access and enjoy Binance Australia’s spot trading platform.”
The move comes amid heightened regulatory scrutiny into the crypto behemoth, spearheaded by chief Changpeng Zhao (CZ). The US Commodity Futures Trading Commission (CFTC) filed a lawsuit against the exchange last month for allegedly operating an illegal trading shop and encouraging users to bypass know-your-customer (KYC) and anti-money laundering (AML) checks, which CZ has denied.
However, that may not stop the commission from shutting down the exchange’s US arm anyways.
CZ reportedly lives in Dubai and has made the area a new focal point for Binance amid increasing pressure from the US — but the emirate is now keen to learn more about who it’s getting into bed before taking the plunge.
Yesterday, it was reported that Dubai has requested more information from Binance into ownership structure as well as governance and auditing procedures, as part of heightened scrutiny into firms seeking crypto licenses in the area.