Australian Securities and Investment Commission Cancels Binance's Derivatives License
Binance Australia's derivatives license in Australia has been revoked by the ASIC, impacting the exchange's ability to offer its derivatives-based services.
The Australian Securities and Investment Commission (ASIC) has withdrawn Binance's derivatives license, affecting the crypto exchange platform's ability to provide derivatives services in the country since July 2022. The decision follows ASIC's deliberation on Binance's mode of operations and came into effect "in response to a request to cancel received from Binance yesterday."
ASIC has demanded that all platform derivatives dealings cease on or before April 14, with derivatives traders required to close all positions held before April 21. This order comes immediately after the termination of Binance's derivatives license.
Despite the license cancellation, Binance Australia will maintain its position as a member of the Australian Financial Complaints Authority (AFCA) until April 4, 2024, according to ASIC's statement.
ASIC has been evaluating Binance's financial operations in Australia, focusing on the classification process for wholesale and retail clients. ASIC Chair Joe Longo explained that the assessment aimed to protect retail and wholesale clients under the country's financial services laws.
The commission's concerns stemmed from the challenges faced by Binance Global and its CEO, Changpeng Zhao, with authorities over the past few years. The company is currently embroiled in a lawsuit with the United States Commodity Futures Trading Commission (CFTC) and has faced investigations and warnings from other regulators, particularly in 2021.
ASIC's decision may be a response to notifications Binance sent its users in late February 2023, stating it would begin closing some derivatives positions and accounts due to investor classification compliance. This action drew the attention of local regulators, who initiated stringent investigations into the exchange's derivatives operations.
In light of ASIC's action, Binance has opted to shift its focus to other operations and services, discontinuing Binance Australia Derivatives. However, the exchange will continue to offer spot trading for Australian citizens.
