Binance Australia Derivatives, the Australian financial services licensee held by Oztures Trading Pty Ltd, has had its license canceled by the Australia Securities & Investment Commission (ASIC). It comes after a request from Binance to cancel the license, which was received by ASIC on the previous day.
Implications For Binance Clients
As per the press release issued by ASIC, starting April 14, 2023, Binance clients will be prohibited from opening new derivative positions or increasing existing ones. Before April 21, 2023, clients must close all their current derivative positions. Any remaining open positions after April 21, 2023, will be closed by the exchange.
ASIC has been conducting a specific evaluation of Binance’s financial services operation in Australia, particularly its differentiation between retail and wholesale clients. On March 29, 2023, ASIC delivered a hearing notice to deliberate on the possible cancellation or suspension of the AFS license owned by Oztures Trading Pty Ltd.
As per the press statement, “ASIC continues to take action to disrupt and deter harm and misconduct within its jurisdiction.” ASIC Chair Joe Longo has emphasized the importance of classifying retail and wholesale clients according to the law and warned potential crypto users that crypto is risky and complex.
Mr. Longo, said:
As we have said before, ASIC supports a regulatory framework for crypto with a focus on consumer protection and market integrity. The final decision as to the regulatory settings is one for Government.
This is not the first time ASIC has taken action against entities in the crypto space. In the past, ASIC has commenced civil penalty proceedings against Finder Wallet Pty Ltd, BPS Financial, and Block Earner for alleged unlicensed conduct and misleading statements in relation to crypto products.
Overseas regulators have also issued regulatory warnings and taken regulatory action against Binance group entities, including the UK Financial Conduct Authority, the Japan Financial Services Agency, and the Ontario Securities Commission.
Binance’s license cancellation emphasizes the need for crypto regulations to protect consumers and market integrity. In the statement, ASIC also warns of the risky and complex nature of crypto, especially derivatives, and highlights the lack of ASIC regulation in the industry. Users should be prepared to lose their investments.
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