The platform has received an order from the local regulator to close all open user positions by April 21

​Binance’s derivatives trading license has been canceled in Australia

06.04.2023 - 10:30

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3 min

What’s new? The Australian Securities and Investments Commission (ASIC) has revoked the derivatives license of crypto exchange Binance Australia. According to a press release, the platform’s local division was ordered by the regulator to close all open user positions by April 21. In addition, ASIC is conducting a targeted review of Binance’s business in Australia, including the classification of retail and wholesale customers.

ASIC’s press release

What else does the press release say? According to ASIC Chair Joe Longo, it is critical that Australian Financial Services (AFS) licensed companies classify retail and wholesale customers under the law. He explained that retail customers trading crypto derivatives have important rights and are protected under financial services legislation, including access to dispute resolution through the Australian Financial Complaints Authority.

Longo added that ASIC supports the regulatory framework for cryptocurrencies in Australia, stressing that the final decision rests with the government.

On February 23, Binance had already forcibly closed all derivatives positions for Australian retail investors that had been misclassified as wholesale. The exchange said that under local laws they needed to prove they met the criteria of a wholesale investor in order to resume access to the derivatives platform.

On April 5, the US Federal Deposit Insurance Corporation (FDIC) forcibly closed the accounts of cryptocurrency customers of the bankrupt Signature Bank.

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What is going on with Binance? In March, the US Commodity Futures Trading Commission (CFTC) accused the exchange and its CEO Changpeng Zhao of operating an illegal digital derivatives exchange as well as failing to comply with customer identification procedures to combat money laundering and terrorist financing. Zhao denied the claims by the regulator. That same month, a group of investors filed a $1 billion lawsuit against Binance.

In early April, blogger Jordan “Cobie” Fish reported that Interpol put Zhao on the international wanted list, but he denied this information.

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