Binance Australia has had its derivatives license cancelled by ASIC, following a request by the exchange. This move raises concerns about Binance’s future in Australia, as the regulatory pressure on the cryptocurrency industry continues to tighten.
ASIC has cancelled Binance Australia’s derivatives license following a request by the exchange on April 5. Binance Australia, which is a subsidiary of Binance, will close all of its customers’ open derivatives positions by April 21.
Binance Australia has stated that it is “winding down” its derivatives product to “pursue a more focused approach”. The platform had just 104 users as of yesterday, indicating that the closure of the derivatives product may not have a significant impact on Binance Australia’s operations.
Binance’s spot crypto exchange in Australia will continue to operate, confirmed Binance CEO Changpeng Zhao in a tweet.
ASIC’s Views on Regulatory Framework for Crypto
In a press release, ASIC Chairman Joseph Longo emphasized the importance of AFS licensees classifying retail and wholesale clients in accordance with the law. He noted that 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 added that ASIC supports a regulatory framework for crypto in Australia, but the final decision lies with the government.
Binance Australia has stated that it is “winding down” its derivatives product to “pursue a more focused approach”. The company has also assured its customers that their funds are safe and that they can continue to trade on Binance’s global platform.
The cancellation of Binance Australia’s derivatives license highlights the regulatory pressure on the cryptocurrency industry. As regulators around the world continue to tighten their grip on the market, companies like Binance will need to ensure that they comply with all laws and regulations or risk losing their license to operate.
Last week, the US Commodity Futures Trading Commission (CFTC) sued Binance and its founder, Changpeng Zhao, for offering unregistered derivatives products in the US.