ASIC revokes Binance Australia license amid “targeted review”

abdelaziz Fathi

The Australian corporate regulator has canceled Binance Australia’s derivatives license at the world’s largest cryptocurrency exchange’s own request, which it filed just yesterday.

Takeprofit Tech

The Australian Securities & Investments Commission (ASIC) said in a press release that the cancellation has no effect on Binance’s membership of the Australian Financial Complaints Authority, which expires on 8 April 2024.

The development comes amid debate and controversy around Binance Australia after it closed derivatives positions of some users. The crypto exchange stated that it had incorrectly classified 500 Australian users as “wholesale investors.”

As per regulation, Binance was required to terminate services to these accounts immediately, but said it will fully compensate affected users for the losses incurred while trading derivatives.

Meanwhile, ASIC has been conducting a “targeted review” of Binance financial services business in the country. As part of the review, the watchdog has been looking into Binance’s classification of retail and wholesale clients. The regulatory body has also expressed concern about Binance’s compliance with Australian Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) laws.

The move also comes shortly after Binance’s Australian subsidiary parted ways with its chief executive officer Leigh Travers.

Travers joined Binance Australia in August 2021 coming from DigitalX, the world’s first publicly-listed blockchain firm. He spent more than seven years, and previously served on the board of leading local blockchain industry body, Blockchain Australia.

At the time, Binance said Travers will prioritize building Binance Australia’s relationships with regulators and growing the company’s brand.

Binance resumed offering its futures, options, and leveraged tokens products to Australian crypto traders in July 2022. The local arm of the world’s largest crypto ecosystem, Binance Australia Derivatives, has launched over-the-counter (OTC) derivative products for wholesale customers under its Australian Financial Services Licence.

That came nearly 10 months after Binance suspended derivatives trading activities in Australia amid increased regulatory pressure. The crypto exchange, the biggest in the world by volume, also stopped offering crypto derivatives products in Brazil and Hong Kong, to get ahead on compliance as it has drawn scrutiny from regulators worldwide.

Binance has faced its fair share of regulatory challenges in earlier times. In 2019, the ASIC warned local investors against Binance, stating that the exchange is operating in the country without proper licensing. Since then, Binance has taken steps to comply with Australian regulations, including registering with the Australian Transaction Reports and Analysis Centre (AUSTRAC), which is the country’s financial intelligence agency responsible for anti-money laundering and counter-terrorism financing.

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