Australia cancels crypto exchange Binance’s derivatives license amid regulatory review

• The ASIC cancelled Binance Australia’s derivatives license, a day after it received a cancellation request from the exchange.
• It was only the last week that the U.S. CFTC sued Binance for allegedly violating compliance rules.

The Australian Securities and Investments Commission (ASIC) cancelled Binance Australia’s derivatives license amid a regulatory probe into the exchange. The decision was made on 6 April, a day after the ASIC received a cancellation request from Binance.

It means that the exchange will no longer be able to provide derivatives trading services in Australia. Customers of Binance Australia must close any existing derivative positions by 21 April. Any remaining open positions will be closed after this date.

It is important to note that these cancellation terms include a provision that allows Binance to continue to be a member of the Australian Financial Complaints Authority until April 2024.

ASIC’s stand on crypto regulations

The scrapping of license comes as ASIC has been conducting a targeted review of Binance’s business in Australia, including its classification of retail and wholesale clients.

ASIC Chair Joe Longo said:

“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.”

Longo further went on to say that ASIC supports a crypto regulatory framework in Australia, but that the final decision rests with the government.

Binance Australia, run by Oztures Trading Pty Ltd., has been providing services as a subsidiary of the global cryptocurrency exchange Binance.

The ownership of Oztures’ license changed in January 2022, and the company began offering derivatives under the name Binance Australia in July 2022. The regulator recently issued a notice of potential cancellation for Oztures’ AFS license.

Binance has come under increased regulatory scrutiny in a number of countries. Moreover, it was only in the last week that the U.S. Commodity Futures Trading Commission (CFTC) sued Binance for allegedly violating compliance rules.