The Australian Securities and Investments Commission (ASIC) has announced the cancellation of the license of Binance Australia Derivatives after conducting a targeted review of Binance’s operations in the country.
The cancellation of the license will take effect on April 14, and clients will not be able to increase their derivatives positions or open new ones with the platform. They will also need to close any existing derivatives positions before April 21, as Binance is expected to close any remaining open positions on that day.
ASIC’s review of firm’s financial services business in Australia focused on the company’s classification of retail and wholesale clients. ASIC chair Joe Longo stated that the review was related to compliance with the classification of retail and wholesale clients.
In its official statement, ASIC mentioned that the global Binance exchange and its CEO, Changpeng “CZ” Zhao, are currently facing a lawsuit from the United States Commodity Futures Trading Commission. ASIC also noted that various company’s group entities had been subject to other regulatory warnings and action worldwide, referring to a series of warnings and investigations initiated by global regulators against the platform in 2021.
Binance responds to ASIC’s decision
Binance has responded to ASIC’s decision by choosing to pursue a “more focused approach” in Australia by closing down Binance Australia Derivatives. A spokesperson for the firm emphasized that spot trading on Binance will still be available for Australian residents.
The news comes after Binance Australia Derivatives sent notifications to its users in late February, stating that it was starting to close certain derivatives positions and accounts due to investor classification compliance. The firm reportedly claimed that it was restricting users who did not meet the requirements to being wholesale investors. Local regulators subsequently launched an investigation, aiming to conduct a “targeted review” of firm’s local derivatives operations.
The cancellation of the Australia Derivatives’ license is the latest regulatory action taken against the company, one of the world’s largest cryptocurrency exchanges. In recent months, the company has faced a series of warnings and regulatory actions from authorities in various countries.
In the United States, the Commodity Futures Trading Commission has filed a lawsuit against the platform, alleging that the company has engaged in illegal trading activities. In the United Kingdom, the Financial Conduct Authority has ordered the Company to cease all regulated activities in the country. In addition, authorities in Japan, Thailand, and the Cayman Islands have issued warnings or taken action against the Company in recent months.
