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Binance to Close Australian Derivatives Business Amid Financial Services Licence Cancellation

Binance to Close Australian Derivatives Business Amid Financial Services Licence Cancellation

Binance said in a statement it had decided to pursue a "more focused approach" in Australia after "recent engagement with ASIC".

By Reuters | Updated: 6 April 2023 18:47 IST

Binance to Close Australian Derivatives Business Amid Financial Services Licence Cancellation

Photo Credit: Reuters

The ASIC has been conducting a "targeted review" of Binance

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Highlights

Many cryptocurrency products and services are not regulated by ASIC
The world's largest cryptocurrency exchange is battling regulatory suits
Last month, the US CFTC sued Binance

Cryptocurrency exchange operator Binance will close its Australian derivatives business after relinquishing a financial services licence on Thursday amid a regulatory probe into its operations.

The Australian Securities and Investment Commission (ASIC) has been conducting a "targeted review" of Binance, first confirmed in February, when Binance said it had misclassified some retail investors as wholesale.

Retail investors are entitled to a higher level of regulatory protection.

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ASIC on Thursday cancelled the Australian financial services licence of Oztures Trading Pty Ltd, trading as Binance Australia Derivatives (Binance), in response to a request from the company.

All positions will close by April 21.

"It is critically important that AFS licensees classify retail and wholesale clients in accordance with the law," ASIC Chair Joe Longo said in a statement.

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“Our targeted review of these matters is ongoing, including focus on the extent of consumer harms.”

The financial services licence authorised Binance to issue derivatives and foreign exchange contracts.

Noting many cryptocurrency products and services are not regulated by ASIC, Longo said the regulator supported a "regulatory framework" for the asset class.

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Binance said in a statement it had decided to pursue a "more focused approach" in Australia after "recent engagement with ASIC".

The closure would not impact Australians using its spot exchange product, it added.

The world's largest cryptocurrency exchange is battling regulatory suits and probes around the world. Last month, the US Commodities Futures Trading Commission (CFTC) sued Binance and its founder Changpeng Zhao for operating what the regulator alleged was an "illegal" exchange.

ASIC's statement noted the CFTC suit as well as regulatory actions in the UK, Japan, Italy and Singapore.

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