Australian regulator cancels Binance’s license at exchange’s own request

Binance’s Australian derivatives license was revoked at the crypto exchange’s own request, Australian Securities and Investments Commission Said After the regulator launched a “targeted review of Binance” on Thursday february,

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From April 14, Binance’s derivatives clients in Australia will not be able to open or widen their existing trading positions. The regulator said that by April 21, Binance would be required to close any remaining trading positions.

ASIC chair Joe Longo said: “Our targeted review of these matters is ongoing, which will include a focus on the extent of consumer harm.”

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“Following the recent engagement with ASIC, Binance has chosen to close the Binance Australia Derivatives business to pursue a more focused approach in Australia,” a Binance spokesperson said, adding that “approximately 100” derivatives customers remain. Were.

Binance’s exchange token was down less than 0.5% on Thursday morning,

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Regulatory scrutiny of Binance has been increasing in recent weeks and months. Anti-money laundering and know-your-customer compliance issues are at the center of a comprehensive complaint from the US Commodity Futures Trading Commission against the crypto exchange and its founder, Changpeng Zhao. The complaint details how fees from derivatives trading provide highly lucrative revenue for Binance.

Binance’s market share has fallen 16% in recent weeks, according to research firm Kaiko, although it remains the world’s most dominant exchange by volume.

An apparently inadvertent compliance issue led to an Australian regulatory investigation. Binance conducts business around the world using a number of subsidiaries, including Oztures Trading Pty Ltd in Australia.

In February, Binance revealed that a “small number” of its Australian customers were classified as “wholesale investors,” a trading classification for experienced investors that gives them access to more sophisticated financial products. This is a designation that roughly corresponds to the “qualified investor” category in the US.

Binance’s high net worth investors have been a point of concern for regulators around the world. In the US, the CFTC accused Binance of offering favorable treatment to its wealthiest customers, helping them meet US regulations by trading through offshore shell companies or virtual private networks.

CNBC previously reported similar techniques promoted by employees and volunteers were used by Binance’s customers in mainland China.

The increased attention to Binance’s practices comes as US regulators crack down on centralized exchanges more broadly. The Securities and Exchange Commission recently warned coinbase that it could soon face potential securities charges.

Australia’s top securities regulator has had a challenging relationship with the crypto industry in recent months, with the regulator pursuing enforcement action against a number of firms found to have breached Australian law.

“Entities in the Binance Group have been the subject of regulatory warnings and action from a number of overseas regulators,” the ASIC release said.