- Clients of Binance must close all derivative positions before April 21
- The leverage option increases the risk for users from crypto derivatives
The Australian Securities and Investments Commission (ASIC) cancelled the Australian financial services license held by Oztures Trading Pty Ltd., the official name of Binance Australia Derivatives (Binance), Bankless Times learned from a press release. The cancellation took effect today.
Clients of Binance are required to close all existing derivative positions before April 21. Effective April 14, they will no longer be able to open new positions or increase existing ones. All remaining open positions will be closed automatically on April 21.
Decision made following targeted review of Binance
The watchdog has been conducting a targeted review of the financial services provided by the world’s biggest crypto exchange by transaction volume in Australia. This includes its classification of wholesale and retail clients.
The decision was made after ASIC issued a notice of hearing under s915C of the Corporations Act last week. At the hearing, ASIC considered whether to suspend or cancel Binance’s financial services license.
Binance will remain a member of another prominent regulator, the Australian Financial Complaints Authority, until April 8 next year. ASIC Chairman Joe Longo commented:
It is critically important that financial service 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.
Repeated warnings about crypto issued
ASIC has repeatedly warned clients of crypto exchanges that cryptocurrencies are complicated and risky. The leverage option increases the risk of crypto derivatives for users further. ASIC does not regulate a large number of crypto products and services.
For its part, Binance has been struggling with regulators lately. It is facing hefty penalties to settle previous regulatory violations it has committed in the US.
Contributors
