Binance Australia Under Scrutiny by ASIC for Derivatives Compliance

Binance Australia, the local branch of the world’s largest cryptocurrency exchange, has reportedly faced a regulatory probe by the Australian Securities and Investments Commission (ASIC) over its derivatives business.

According to Bloomberg, ASIC conducted searches at Binance Australia locations on July 4 as part of an ongoing investigation into Binance’s former Australian derivatives platform, which was shut down in April 2023.

Binance Australia told Cointelegraph that it is cooperating with local authorities and complying with local regulatory standards to serve its users in Australia.

What Happened to Binance Australia Derivatives?

Binance Australia Derivatives was a platform that allowed Australian users to trade cryptocurrency futures and options contracts with leverage.

However, in April 2023, ASIC canceled the license of the platform after a targeted review of its operations.

The regulator found that Binance had failed to properly classify its clients as retail or wholesale investors, as required by the Corporations Act 2001.

This meant that some retail investors may have been exposed to excessive risks and losses from trading complex and volatile derivatives products.

As a result, Binance decided to close down its derivatives business in Australia and focus on its spot trading services, which allow users to buy and sell cryptocurrencies at market prices.

RELATED: Binance Exposes “Binance Nigeria Limited” as a Scam Website

How Does This Affect Binance Users in Australia?

If you are a Binance user in Australia, you can still access the exchange’s spot trading platform and trade over 300 cryptocurrencies with low fees and high liquidity. You can also use Binance’s other features such as:

Binance Earn: Earn passive income from your crypto assets by staking, lending or saving them on Binance.

Binance Card: Spend your crypto anywhere Visa is accepted with the Binance Card, a debit card that converts your crypto to fiat at the point of sale.

Binance Academy: Learn more about crypto and blockchain with free educational resources from Binance Academy.

Binance Charity: Support social causes and humanitarian projects with crypto donations through Binance Charity.

However, you will no longer be able to trade derivatives products such as futures and options on Binance in Australia.

If you had any open positions on Binance Australia Derivatives before it was shut down, they would have been closed automatically and your funds would have been returned to your spot wallet.

What Does This Mean for the Crypto Industry in Australia?

The regulatory scrutiny of Binance Australia Derivatives is part of a broader trend of increased oversight of the crypto industry in Australia and around the world.

As more people adopt crypto as an alternative asset class, regulators are trying to ensure that investors are protected from fraud, scams and market manipulation.

While some crypto enthusiasts may see regulation as a threat to innovation and freedom, others may welcome it as a sign of legitimacy and maturity for the industry.

Regulation can also help foster trust and confidence among consumers, businesses and institutions that want to use crypto for various purposes.

Ultimately, regulation can be a positive force for the crypto industry if it is balanced, fair and transparent. It can also create opportunities for collaboration and dialogue between regulators and stakeholders to find common ground and solutions that benefit everyone.

Binance Australia said that it is committed to working with local authorities and meeting local regulatory standards in order to serve its users in Australia in a fully compliant manner.

The company also said that it is constantly improving its products and services to provide the best possible experience for its users.