Binance Australia, a subsidiary of the world’s largest cryptocurrency exchange by trading volume, has lost its license to offer derivatives products in the country. The Australian Securities and Investments Commission (ASIC) announced on Thursday that it has cancelled the Australian financial services license held by Oztures Trading Pty Ltd, which operates as Binance Australia Derivatives.
The license cancellation was effective immediately and followed a request from Binance itself, which submitted a voluntary cancellation application on Wednesday. According to ASIC, Binance Australia Derivatives failed to comply with the classification of retail and wholesale clients, which are subject to different levels of protection and regulation under Australian law.
As a result of the license cancellation, Binance Australia Derivatives clients will not be able to open new positions or increase existing positions on the platform from April 14. They will also have to close any remaining positions by April 21, after which Binance will liquidate any open positions. Binance Australia Derivatives will remain a member of the Australian Financial Complaints Authority until April 8, 2024, to handle any disputes or complaints from its clients.
ASIC chair Joe Longo said that retail clients trading in crypto derivatives are entitled to important rights and consumer protections under Australian financial services laws, including access to external dispute resolution. He added that ASIC has been conducting a targeted review of Binance’s operations in Australia, including its derivatives business.
The license cancellation is another blow to Binance’s global reputation, which has been tarnished by a series of regulatory warnings and actions from various jurisdictions around the world. The US Commodity Futures Trading Commission (CFTC) is reportedly investigating Binance for allegedly allowing US residents to trade derivatives without proper registration. Binance has also faced scrutiny from regulators in the UK, Japan, Germany, Italy, Hong Kong, Singapore, Thailand, and Canada.
Binance has maintained that it complies with local laws and regulations wherever it operates and that it is willing to cooperate with regulators. The company has also taken steps to improve its compliance and risk management practices, such as hiring former regulators and launching new platforms that adhere to specific regulatory frameworks.
Binance Australia Derivatives was launched in July 2020 as a separate entity from Binance Australia, which offers spot trading services. Binance Australia is not affected by the license cancellation and continues to operate normally. However, the future of Binance’s derivatives business in Australia remains uncertain as ASIC has not indicated whether it will grant a new license to Binance or any other crypto derivatives provider.