Binance Australia Derivatives license canceled by regulator

After the exchange requested the action yesterday, the Australian Securities and Investments Commission canceled Binance's financial services license in the country.

Oztures Trading Pty Ltd, trading as Binance Australia Derivatives, held the license. It authorized the issuance and making of a market in derivatives and foreign exchange contracts, dealing in specified financial products on behalf of another person, and the providing of financial product advice in specified financial products.

From April 14, users will no longer be able to increase derivatives positions or open new positions on Binance. This will require clients to close any existing derivatives positions before April 21. The exchange will close any remaining open positions on that date.

The Australian regulator states it "has been conducting a targeted review of Binance financial services business in Australia, including its classification of retail and wholesale clients." ASIC issued a notice of hearing on March 29 to consider whether the AFS license should be canceled or suspended.

“It is critically important that AFS licensees classify retail and wholesale clients in accordance with the law," ASIC Chair Joe Longo said, adding: "Retail clients trading in crypto derivatives are afforded important rights and consumer protections under financial services laws in Australia, including access to external dispute resolution through the Australian Financial Complaints Authority."

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

"Following recent engagement with ASIC, Binance has chosen to pursue a more focused approach in Australia by winding down the Binance Australia Derivatives business," Binance said in a statement shared with The Block, adding: "This does not affect Binance’s continued commitment to the development of the local blockchain and digital assets industry and Australians can continue to enjoy the use of our spot exchange product. There are a small number of remaining users on Binance Australia Derivatives, approximately 100, and we have reached out to notify them of the winding down process.”

Binance's global regulatory scrutiny is intensifying

ASIC's announcement also makes specific mentions the United States Commodities Futures Trading Commission's filing of a civil enforcement action in the U.S. District Court for the Northern District of Illinois.

The action charges Binance CEO Changpeng Zhao and other entities with multiple violations of the Commodity Exchange Act and CFTC regulations. Former Binance chief compliance officer Samuel Lim was also charged with aiding and abetting the violations.

ASIC's announcement also provides a list of other regulators looking at the leading crypto exchange, including the UK's Financial Conduct Authority, Japan's Financial Services Agency, the Monetary Authority of Singapore and others.

Updated with additional context and information, and a statement from Binance.