Australia Cancels Binance's Derivatives Business License: Here's Why

Hey Hackers!

On April 6th, the Australian Securities & Investments Commission (ASIC) announced, via media release, the cancelation of the “Australian financial services (AFS) licence held by Oztures Trading Pty Ltd, trading as Binance Australia Derivatives (Binance)”.

ASIC revealed that they have been conducting a “targeted review” of Binance’s business services in Australia regarding the crypto company’s reportedly irregular classification of retail investors as wholesale clients.

Last week, ASIC issued a hearing notice, under the Corporations Act 2001, to determine whether to cancel or suspend Binance’s AFS license.

It appears that Binance did not want to wait for that decision and actually requested a cancelation of their license the day before the hearing.

“Following recent engagement with ASIC, Binance has chosen to pursue a more focused approach in Australia by winding down the Binance Australia Derivatives business.

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.”

- Binance Spokesperson

Due to the cancelation of the Financial Services License, clients cannot increase derivatives positions or open new positions with Binance, and all positions will be closed on April 21st.

ASIC states that this cancelation does not excuse Binance from their responsibility to serve as a member of Australian Financial Complaints Authority until the end of April 2024.

“It is critically important that AFS licensees classify retail and wholesale clients in accordance with the law.

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.

ASIC supports a regulatory framework for crypto with a focus on consumer protection and market integrity. The final decision as to the regulatory settings is one for Government.”

- Joe Longo, ASIC Chair

Binance is dealing with a bunch regulatory investigations and lawsuits, so it may not be a bad idea for them to just give up and cancel their license to focus their efforts where they are more needed; like in the United States against the SEC and CFTC.

What are your thoughts on this news?

Do you think this might affect Binance’s overall business in Australia?

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Also published here