AISC probes Binance Australia over derivatives activities

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Key Takeaways:

  • ASIC’s investigation intended to evaluate Binance’s client categorisation in its derivatives business. 
  • This comes after the termination of Binance’s derivative licence in Australia in April, which forced the exchange to close down related operations.

In a recent development, the Australian Securities and Investments Commission (ASIC) has launched an investigation into Binance Australia regarding its derivatives trading activities. The probe comes as regulators worldwide tighten their scrutiny over cryptocurrency exchanges and their compliance with existing financial regulations.

According to Bloomberg, the Australian Securities and Investments Commission (ASIC) carried out searches at Binance Australia’s locations on Tuesday as part of an ongoing investigation into the company’s former derivatives business in Australia. 

Binance Australia has acknowledged the investigation and stated that it is collaborating with local authorities to ensure compliance with regulatory standards. The company remains committed to serving its users in Australia in a fully compliant manner.

The investigation focuses on particular facets of the now-shuttered local derivatives business of the company, such as classifying retail and wholesale clients.

An ASIC spokesman recognised the ongoing nature of the regulatory inquiry of Binance Australia but declined to confirm or deny particular searches. For its part, Binance emphasised that it was dedicated to “cooperating with local authorities” and upholding legal requirements in a “fully compliant manner.

ASIC revoked Binance Australia’s licence for its derivatives operation in April. As a result, the exchange declared that it will close the local derivatives exchange while continuing to operate its spot trading platform.

The business had already cancelled certain Australian users’ derivatives positions, claiming that they were mistakenly classed as wholesale investors.

We are unable to confirm or deny any operational detail, such as potential searches, according to an ASIC spokeswoman, who in April revoked Binance Australia’s licence. The representative also noted that the regulator’s inquiry “is ongoing.

In light of the regulatory challenges it has faced, Binance has made the decision to adopt a “more focused approach” in Australia.

 As a result, the company has decided to discontinue its derivatives trading services in the country. However, Binance will continue to provide spot trading services for its customers in Australia.

The prominent global cryptocurrency giant has encountered regulatory challenges from various jurisdictions. 

The US Securities and Exchange Commission (SEC) has alleged that Binance violated securities regulations, while rumors have circulated about French authorities visiting Binance offices in France to investigate potential illicit activities related to digital asset services and money laundering.

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Aadrika Sharma
Aadrika Sharma

I enjoy writing and try to learn new things every passing day!

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