Binance's Australian Derivatives License Axed — A Regulatory Storm Unleashed On The Crypto Giant

The Australian Securities and Investments Commission (ASIC) has revoked Binance's (CRYPTO: BNB) license for its derivatives operations in the country while it examines the group's local activities, as per an announcement on Thursday.

Binance Australia confirmed in a tweet that its derivatives exchange in the country will be shut down, but its spot platform will continue to operate.

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 requested that the Australian financial services license, which is held by its local subsidiary Oztures Trading Pty Ltd (trading as Binance Australia Derivatives), be canceled, according to ASIC.

From April 14, users in Australia will be unable to open or expand their derivatives positions with Binance.

By April 21, all existing derivatives positions must be closed, the statement specified.

The regulator's "targeted review" of Binance's Australian operations involves the classification of retail and wholesale clients. ASIC Chair Joe Longo emphasized in the statement the importance of complying with the law when classifying retail and wholesale clients.

Also Read: License Lockdown: Dubai's Crypto Clampdown Leaves Binance Sweating

This development comes in the wake of a lawsuit filed against Binance and its founder, Changpeng Zhao, by the U.S. Commodity Futures Trading Commission, which accused the company of violating several regulations, including allowing Americans to use the platform for crypto derivatives trading without proper registration.

ASIC noted in its statement that Binance's group of entities has faced regulatory warnings and actions from various international regulators, including the U.K. Financial Conduct Authority, Japan Financial Services Agency, and the Monetary Authority of Singapore.

The Australian regulator has been cautioning investors about the risks and complexities associated with crypto assets, stating that many of the products are not regulated.

"Crypto derivatives pose additional risks to consumers through the operation of leverage," the statement added, further explaining that ASIC is conducting a targeted review of these matters.

Read Next: BRICS Currency Game-Changer: Impact Of Financial Earthquake On Global Economic Dynamics

Photo: Unsplash