CEFIREGULATION

Binance voluntarily surrenders Australian Financial Services License, CZ clarifies spot trading is not affected

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Binance voluntarily surrenders Australian Financial Services License, CZ clarifies spot trading is not affected

The Australian Securities and Investments Commission (ASIC) has revoked the Australian Financial Services (AFS) license of Oztures Trading Pty Ltd, a subsidiary of Binance responsible for derivatives trading in Australia, also known as Binance Australia Derivatives. This decision takes immediate effect. CZ clarified in a tweet that the cancellation specifically pertains to the derivatives license, and spot trading is not affected. Binance Australia exchange continues to operate as usual.

Note: This article has been updated to emphasize that Binance voluntarily surrendered the derivatives license prior to the cancellation hearing.

ASIC Investigated Binance in February

Binance underwent a "targeted review" by the Australian Securities and Investments Commission (ASIC) in February, which included the classification of Binance's retail and wholesale clients. Binance stated on Twitter that a small number of Australian users were incorrectly classified as wholesale investors. In compliance with Australian regulations, Binance notified these users, closed their derivative positions, and compensated for any losses incurred, affecting around 500 users.

According to a statement released by ASIC, on March 29, ASIC issued a hearing notice under s915C of the Corporations Act 2001 to consider whether ASIC should cancel or suspend the AFS license held by Oztures Trading Pty Ltd. Binance received a request to cancel the license yesterday.

ASIC Chairman Joe Longo stated:

Proper classification of retail and wholesale clients is crucial. Retail clients trading in crypto derivative products in Australia are entitled to important rights and consumer protections, including access to external dispute resolution through the Australian Financial Complaints Authority.

ASIC continues to monitor the impact on consumers affected by this incident.

Regarding existing Binance clients, all remaining open positions will be forcibly closed on April 21.

Binance Under Regulatory Scrutiny in Multiple Countries

On March 27, 2023, the U.S. Commodity Futures Trading Commission (CFTC) filed a civil lawsuit in the U.S. District Court for the Northern District of Illinois against Binance Group CEO Changpeng Zhao and three entities operating the Binance platform, alleging multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations.

In addition to the CFTC, Binance Group has been the subject of regulatory warnings and actions by many overseas regulatory bodies. The article also mentions the Financial Conduct Authority of the UK, the Financial Services Agency of Japan, CONSOB of Italy, the Monetary Authority of Singapore, the Dutch Central Bank, the Ontario Securities Commission, and the Securities and Exchange Commission of Thailand.

CZ Clarifies Spot Trading Unaffected

CZ clarified on Twitter that the revoked license pertains to derivative trading, and spot trading is not affected. Binance Australia Exchange continues to operate normally. CZ reiterated that the withdrawal of the derivative license was voluntary by Binance and only 104 customers were affected.