The cancellation of Binance’s derivative license came at the cryptocurrency exchange’s own request, according to an official announcement from the Australian Securities & Investments Commission. After the regulator started a “targeted review of Binance” in February, this decision became public.
Due to this, Australian users of Binance’s derivatives products will not be able to initiate new trades or increase their current ones starting on April 14. The regulator has said that Binance will subsequently be compelled to close off any open trading positions a week later.
Reason Behind the Cancelation of Binance’s Derivative License
According to ASIC Chair Joe Longo, their targeted review of the aforementioned problems is still ongoing. One of these issues is an emphasis on the magnitude of customer harm. A Binance representative, on the other hand, stated that in light of the recent ASIC engagement, the respective exchange platform has chosen to take a more focused approach in Australia by shutting down the Binance Australia Derivatives business. The spokesman then stated that “approximately 100” derivatives customers remained. Because of this announcement, Binance’s exchange token fell by less than 0.5% on Thursday morning.
Binance Under Scrutiny
Binance has dominated the news in recent weeks as regulatory scrutiny has mounted. It was recently reported that the relevant exchange, as well as its CEO and founder Changpeng Zhao, were dealing with anti-money laundering and know-your-customer compliance difficulties, which are at the center of the U.S. The lengthy complaint was filed by the Commodity Futures Trading Commission. The complaint described how fees from derivatives trading supplied Binance with extremely lucrative revenue.
The largest exchange in the world by volume, according to the research firm Kaiko, is Binance, but its market share was recently reported to have decreased by 16%. According to accounts, the Australian regulatory investigation was sparked by an unintentional compliance problem.
Worldwide Business of Binance
Oztures Trading Pty Ltd in Australia is only one of a vast number of subsidiaries that Binance is known for operating over the world. These global businesses are known to have been impacted by the increased scrutiny on Binance’s activities, which comes as US regulators tighten down on centralized exchanges more widely. It’s also worth noting that the Securities and Exchange Commission has warned Coinbase that it could face securities charges shortly.
On the other hand, Australia’s top securities regulator has had a rocky relationship with the crypto industry in recent months. It was seen conducting enforcement measures against various corporations accused of breaking Australian law by the regulator. ASIC then stated that “a number of overseas regulators have issued regulatory warnings and taken action against finance group entities.”