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ASIC cancels Binance Australia Derivatives’ financial services license

In a major development for the crypto industry in Australia, the country’s regulatory authority, the Australian Securities and Investments Commission (ASIC), has cancelled the Australian financial services licence of Oztures Trading Pty Ltd, trading as Binance Australia Derivatives.

The decision came after a targeted review by ASIC of Binance’s financial services business in Australia, including its classification of retail and wholesale clients.

As per the terms of the cancellation, clients will not be able to increase derivatives positions or open new positions with Binance from April 14, 2023. Binance will require clients to close any existing derivative positions before April 21, 2023, and on that day, Binance will close any remaining open positions. However, the cancellation does not affect the requirement for Binance to continue as a member of the Australian Financial Complaints Authority until April 8, 2024.

ASIC’s Chair Joe Longo emphasized the importance of correctly classifying retail and wholesale clients according to the law and reiterated that retail clients trading in crypto derivatives are entitled to important rights and consumer protections under financial services laws in Australia. He also highlighted that ASIC’s ongoing review will focus on the extent of consumer harms.

While ASIC has repeatedly warned potential crypto users that crypto is risky and complex, crypto derivatives pose additional risks to consumers through the operation of leverage. Mr. Longo added that many crypto products and services are not regulated by ASIC and that crypto users should be prepared to lose any funds they invest in crypto.

The cancellation of Binance’s Australian financial services license is not an isolated case. ASIC continues to take action to disrupt and deter harm and misconduct within its jurisdiction. In the past few months, ASIC has initiated civil penalty proceedings against Finder Wallet Pty Ltd, Block Earner, and BPS Financial, alleging unlicensed conduct, inadequate risk disclosure, and misleading statements, respectively.

Binance group entities have also faced regulatory warnings and action from several overseas regulators, including the UK Financial Conduct Authority, Japan Financial Services Agency, and the Monetary Authority of Singapore.

The Commodities Futures Trading Commission in the US has also filed a civil enforcement action against Binance’s CEO and three entities that operate the Binance platform, charging them with numerous violations of the Commodity Exchange Act and CFTC regulations.

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