Binance Australia License Cancelled by ASIC at Exchange's Request

Thursday, 06/04/2023 | 08:07 GMT by Damian Chmiel
  • Binance Australia Derivatives was operated by Oztures Trading Pty Ltd.
  • The exchange is facing a CFTC lawsuit and regulatory warnings worldwide.
Australia

On Thursday, The Australian markets regulator, ASIC , informed that it canceled a financial markets license held by Binance Australia Derivatives, operated by Oztures Trading Pty Ltd. Although at first glance, it may seem that the regulatory hurdles of the renowned crypto exchange seem to have no end. This time, the decision to withdraw the license was made by Binance itself.

However, it came after the regulator held a hearing last week, considering whether it should suspend or cancel the license held by Oztures Trading.

ASIC Cancels Binance License in Australia

According to ASIC's statement, starting from 14 April 2023, it will not be possible for clients to increase their derivatives positions or open new positions with Binance. Additionally, the crypto exchange will require all clients to close any existing derivative positions they may have before 21 April 2023. If they fail to do so, the exchange that day will close all remaining trades automatically.

The supervisor has been executing a focused evaluation of Binance's financial services operations within Australia, with particular attention to the categorization of retail and wholesale consumers. On 29 March 2023, ASIC served a hearing notice to assess whether the AFS license held by Oztures Trading Pty Ltd should be revoked or put on hold.

"It is critically important that AFS licensees classify retail and wholesale clients in accordance with the law. Retail clients trading in crypto derivatives are afforded important rights and consumer protections under financial services laws in Australia, including access to external dispute resolution through the Australian Financial Complaints Authority," Joe Longo, the Chairman at ASIC, commented.

The stipulations surrounding the termination encompass a clause stating that the annulment will not impact Binance's obligation to remain a part of the Australian Financial Complaints Authority until 8 April 2024.

Taking the opportunity, ASIC reminds us that cryptocurrencies are a risky and complicated financial instrument, and cryptocurrency derivatives carry additional risks due to leverage.

Binance's Regulatory Hurdles

ASIC, in its announcement regarding the cancellation of Binance's license, reminds us that on 27 March 2023 the US Commodities Futures Trading Commission (CFTC ) declared that it has initiated a civil enforcement lawsuit in the US District Court for the Northern District of Illinois. It accused Changpeng Zhao, the CEO of the Binance Group, and three organizations responsible for Binance's operations of multiple breaches of the Commodity Exchange Act (CEA) and CFTC regulations.

A mere few hours following CFTC’s legal action, Binance's CZ openly dismissed the accusations as "unexpected and disappointing," characterized by "an incomplete recitation of facts." In a concise retort via an official blog entry, Zhao denied all the primary claims, ensuring that comprehensive responses will be provided in due course.

Earlier, many other overseas regulators published their own warnings regarding Binance operations. There are at least seven regulators on the list, including the UK's FCA, Japan's FSA, Italy's CONSOB, Singapore's MAS, Netherlands Central Bank, Ontario Securities Commission and Thailand's SEC.

Despite the regulatory problems that have dogged Binance since at least 2021, the exchange achieved its largest market share among other cryptocurrency exchanges in March. Binance's popularity grew despite declining volumes at other major exchange offerings and the US legal issues with the BUSD stablecoin.

FCA Stops WealthTek and RoboForex Increases Partner Commissions. Read today’s news nuggets!

On Thursday, The Australian markets regulator, ASIC , informed that it canceled a financial markets license held by Binance Australia Derivatives, operated by Oztures Trading Pty Ltd. Although at first glance, it may seem that the regulatory hurdles of the renowned crypto exchange seem to have no end. This time, the decision to withdraw the license was made by Binance itself.

However, it came after the regulator held a hearing last week, considering whether it should suspend or cancel the license held by Oztures Trading.

ASIC Cancels Binance License in Australia

According to ASIC's statement, starting from 14 April 2023, it will not be possible for clients to increase their derivatives positions or open new positions with Binance. Additionally, the crypto exchange will require all clients to close any existing derivative positions they may have before 21 April 2023. If they fail to do so, the exchange that day will close all remaining trades automatically.

The supervisor has been executing a focused evaluation of Binance's financial services operations within Australia, with particular attention to the categorization of retail and wholesale consumers. On 29 March 2023, ASIC served a hearing notice to assess whether the AFS license held by Oztures Trading Pty Ltd should be revoked or put on hold.

"It is critically important that AFS licensees classify retail and wholesale clients in accordance with the law. Retail clients trading in crypto derivatives are afforded important rights and consumer protections under financial services laws in Australia, including access to external dispute resolution through the Australian Financial Complaints Authority," Joe Longo, the Chairman at ASIC, commented.

The stipulations surrounding the termination encompass a clause stating that the annulment will not impact Binance's obligation to remain a part of the Australian Financial Complaints Authority until 8 April 2024.

Taking the opportunity, ASIC reminds us that cryptocurrencies are a risky and complicated financial instrument, and cryptocurrency derivatives carry additional risks due to leverage.

Binance's Regulatory Hurdles

ASIC, in its announcement regarding the cancellation of Binance's license, reminds us that on 27 March 2023 the US Commodities Futures Trading Commission (CFTC ) declared that it has initiated a civil enforcement lawsuit in the US District Court for the Northern District of Illinois. It accused Changpeng Zhao, the CEO of the Binance Group, and three organizations responsible for Binance's operations of multiple breaches of the Commodity Exchange Act (CEA) and CFTC regulations.

A mere few hours following CFTC’s legal action, Binance's CZ openly dismissed the accusations as "unexpected and disappointing," characterized by "an incomplete recitation of facts." In a concise retort via an official blog entry, Zhao denied all the primary claims, ensuring that comprehensive responses will be provided in due course.

Earlier, many other overseas regulators published their own warnings regarding Binance operations. There are at least seven regulators on the list, including the UK's FCA, Japan's FSA, Italy's CONSOB, Singapore's MAS, Netherlands Central Bank, Ontario Securities Commission and Thailand's SEC.

Despite the regulatory problems that have dogged Binance since at least 2021, the exchange achieved its largest market share among other cryptocurrency exchanges in March. Binance's popularity grew despite declining volumes at other major exchange offerings and the US legal issues with the BUSD stablecoin.

FCA Stops WealthTek and RoboForex Increases Partner Commissions. Read today’s news nuggets!

About the Author: Damian Chmiel
Damian Chmiel
  • 1624 Articles
  • 36 Followers
About the Author: Damian Chmiel
Damian's adventure with financial markets began at the Cracow University of Economics, where he obtained his MA in finance and accounting. Starting from the retail trader perspective, he collaborated with brokerage houses and financial portals in Poland as an independent editor and content manager. His adventure with Finance Magnates began in 2016, where he is working as a business intelligence analyst.
  • 1624 Articles
  • 36 Followers

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