Binance’s Australian derivatives license was canceled at the crypto exchange’s own request, the Australian Securities & Investments Commission said Thursday, after the regulator had begun a “targeted review of Binance” in February.
Beginning April 14, Binance’s derivatives clients in Australia will not be able to open or increase their existing trading positions. By April 21, Binance will be required to close out any remaining trading positions, the regulator said.
“Our targeted review of these matters is ongoing, including focus on the extent of consumer harms,” ASIC Chair Joe Longo said.
“Following recent engagement with ASIC, Binance has chosen to pursue a more focused approach in Australia by winding down the Binance Australia Derivatives business,” a Binance spokesperson said, adding that there were “approximately 100″ derivatives customers left.
Binance’s exchange token was down just under 0.5% on Thursday morning.
Regulatory scrutiny of Binance has been mounting in recent weeks and months. Anti-money laundering and know-your-customer compliance issues are at the heart of the U.S. Commodity Futures Trading Commission’s extensive complaint against the crypto exchange and its founder, Changpeng Zhao. The complaint detailed how fees from derivatives trading provided highly lucrative revenue for Binance.
Binance’s market share has slipped 16% in recent weeks, according to research firm Kaiko, though it remains the most dominant exchange in the world by volume.
An apparently inadvertent compliance issue led to the Australian regulatory probe. Binance does business around the world using a large number of subsidiaries, including Oztures Trading Pty Ltd in Australia.
In February, Binance disclosed that a “small number” of its Australian customers had been classified as “wholesale investors,” a trading classification for experienced investors that let them access more sophisticated financial products. It’s a designation that’s roughly analogous to the “qualified investor” category in the U.S.
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