The derivatives license of Binance Australia was revoked due to regulatory action.
The Australian Securities and Investments Commission (ASIC) terminated Binance’s derivatives license, forcing the largest cryptocurrency exchange in the world to liquidate all open holdings by April 21.
The regulatory body’s verdict is the outcome of a thorough investigation into Binance’s operations. ASIC has expressed concerns regarding the company’s classification of retail and wholesale clients, which has significant consequences for consumer protection in Australia.
We have cancelled the Australian financial services licence held by Oztures Trading Pty Ltd, trading as Binance Australia Derivatives https://t.co/lwqfRanBc2 #crypto #binance pic.twitter.com/DcmX4xdhpD
— ASIC Media (@asicmedia) April 6, 2023
Joe Longo, chairman of the Australian Securities and Investments Commission, emphasized the need for precise client classification, given that retail consumers who participate in crypto derivatives trading are entitled to rights and protections under Australia’s financial services legislation.
Longo highlighted ASIC’s support for a regulated framework for cryptocurrencies in Australia. However, he acknowledged that the government holds a final decision.
In response to these occurrences, Binance Australia announced its decision to “wind down” its derivatives offering in order to “pursue a more focused approach.”
We are winding down our local derivatives exchange to focus our efforts on our locally registered spot exchange.
Read more about it here: https://t.co/yMqiqPCO0F
— Binance Australia (@Binance_AUS) April 6, 2023
Binance Hit By Regulatory Challenges
Binance’s recent challenges extend beyond Australian borders, as the exchange faces growing scrutiny from regulators across the globe.
The US Commodity Futures Trading Commission (CFTC) filed a lawsuit against the exchange a few days ago, accusing it of operating derivatives products in the United States without authorization.
This development followed a number of regulatory warnings and actions from numerous international regulators, including the UK Financial Conduct Authority, the Japan Financial Services Agency, and the Monetary Authority of Singapore.
Regulation of Cryptocurrencies in the Future
The suspension of Binance Australia’s derivatives license by the Australian Securities and Investments Commission draws attention to the future trajectory of cryptocurrency regulation in Australia and around the world.
As regulatory bodies increase their focus on crypto firms, the ever-evolving landscape provides an abundance of obstacles and uncertainties to the millions of investors and consumers involved in this expanding industry.
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