The Australian Securities and Investments Commission (ASIC) has revoked the license of Binance’s locale entity, Oztures Trading, which has been operating as a financial services business in Australia.
This move comes just a few days after the world’s largest cryptocurrency exchange was accused by US regulators of operating an illegal exchange. ASIC has stated that it had issued a notice to Binance on March 29, warning that it was considering suspending or cancelling the group’s license. However, the notice was ignored, which led to the license being cancelled.
The Commodities Futures Trading Commission, a powerful US regulator, accused Binance of multiple wilful breaches of US law. Binance will no longer be allowed to sell highly complex derivative products to Australian customers from April 14.
The customers will have to close their positions by April 21. ASIC’s review of Binance’s financial services business in Australia was triggered by Binance’s announcement in February that it had wrongly classified retail clients as wholesale clients. The latter can be sold a range of high-risk products that are banned for retail clients.
ASIC Chairman Joe Longo said that it is crucial for AFS licensees to classify retail and wholesale clients in compliance with the law. Retail clients trading in crypto derivatives are entitled to important rights and consumer protections under financial services laws in Australia, including access to external dispute resolution through the Australian Financial Complaints Authority. Mr. Longo added that ASIC’s targeted review of these issues is ongoing and it is focusing on the extent of consumer harms.
Binance’s spokesperson said that Australian customers could still use its spot exchange product. Binance had obtained a license to operate in Australia in early 2022.
However, only 100 customers were still using its derivative products. Following recent engagement with ASIC, Binance has decided to pursue a more focused approach in Australia by winding down the Binance Australia Derivatives business. However, the exchange’s commitment to the development of the local blockchain and digital assets industry remains unchanged.
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