The Australian financial regulator, ASIC, has canceled Binance’s derivatives business license in the country. This means that Binance is no longer able to offer its derivatives products to Australian customers. The decision follows similar moves by regulators in other countries, including the UK and Japan, and highlights the increased scrutiny that cryptocurrency exchanges are facing around the world. Binance has faced several regulatory challenges in recent months, with the company being banned or restricted in several countries. The cancelation of its Australian license is seen as a significant blow to the company’s growth prospects.
Binance Australia Derivatives has had its operating license canceled by the Australian Securities & Investments Commission (ASIC) as the company continues to face regulatory challenges. The license cancellation, which allows Binance to offer over-the-counter derivative products to Australians, comes one day after the crypto exchange requested the move. Derivatives traders, numbering around 100, are expected to close existing positions by April 2023, after which the exchange will close all open positions. Despite this setback, Binance remains committed to the development of the local blockchain and digital assets industry, and Australians can continue to use the company’s spot exchange product.
The ASIC’s decision comes amid a targeted review of Binance that began in February. At that time, the exchange liquidated 500 user positions after determining that those users had been incorrectly labeled as “wholesale investors.” In Australia, a wholesale investor is usually regarded as more experienced with trading and financial assets, and thus does not need the same guardrails and protections as retail investors.
The situation in the US is more challenging, with the Commodity Futures Trading Commission (CFTC) filing a lawsuit against Binance last month, resulting in the crypto exchange being charged with multiple trading violations, including failing to register its derivatives business before offering it to US users, and trading against its own clients. The lawsuit is one of many similar moves from the Securities and Exchange Commission, the Department of Justice, and the Internal Revenue Service.
With these challenges, Binance has chosen to adopt a more focused approach in Australia by winding down its derivatives business. However, with the company’s continued commitment to the development of the local blockchain and digital assets industry, Australians can remain hopeful that Binance will contribute positively to the growth of the industry.