Binance Derivatives Business Under Review By Australia’s Main Securities Regulator
Australia’s securities regulator, the Australian Securities and Investments Commission (ASIC), has initiated a “targeted review” of Binance, the world’s largest cryptocurrency exchange. The review focuses on Binance’s local derivatives business, including its “classification of retail clients and wholesale clients.”
ASIC performs a wide range of functions to fulfill its mandate of regulating and overseeing Australia’s financial markets and financial service providers, including registration & licensing, enforcement, market surveillance, consumer protection and more. Ultimately, ASIC’s primary objective is to ensure that Australia’s financial markets are fair, transparent, and competitive.
ASIC also provides a range of services to help investors and consumers make informed decisions, including registering companies and financial service providers, maintaining a public register of companies and other entities, and providing guidance and educational resources.
A Binance representative confirmed the exchange closed the derivatives positions of some Australian users who were incorrectly classified as wholesale investors, affecting 500 users, Bloomberg reported. The company would compensate the affected customers for any losses incurred.
While Binance tweeted about the closure, the ASIC said Binance had not yet reported the matter to the regulator as required by its Australian financial services license.
However, a company spokesperson said the exchange was “committed” to following all relevant Australian laws.
Binance had been under increasing scrutiny as regulators worldwide ramp up their scrutiny of the crypto industry following the collapse of the FTX exchange last year.
Binance’s global business and its U.S. platform are currently subject to multiple regulatory investigations.
In response to the ASIC’s review, Binance CEO Changpeng “CZ” Zhao said the exchange would “review the situation and see if & when we can re-open futures offerings in Australia,” adding “please ignore FUD,” which refers to “fear, uncertainty and doubt” in the crypto industry.
This article was originally published on Benzinga and appears here with permission.