Soon after the cancellation of its financial services license, Binance announced that it is closing down its Australian derivatives business
The world’s leading cryptocurrency exchange, ‘Binance’ recently announced that it is closing down its derivatives business in Australia. Binance took this decision right after Australian regulators cancelled the company’s financial services licence.
Australian Securities and Investment Commission (ASIC) probed into the company’s operations and conducted a detailed investigation, before finally announcing the decision to relinquish Binance’s financial services licence.
According to details, these investigations conducted by ASIC started as early February and were confirmed once Binance announced that it misclassified a number of its retail investors as wholesale investors.
Stating retail investors as wholesale investors, opens doors to a lot of trust issues, not just with users but also regulatory authorities. This is because retail investors generally receive a large amount of regulatory protection, which is threatened once retail investors are falsely listed as wholesale investors.
Keeping its points ahead, the ASIC went on to cancel the financial services licence of Oztures Trading Pty Ltd, which was operating as the Binance Australia Derivatives.
“It is critically important that AFS licensees classify retail and wholesale clients in accordance with the law,” said ASIC Chair Joe Longo. “Our targeted review of these matters is ongoing, including focus on the extent of consumer harms,” he added.
According to details given out by ASIC and Binance, all trades and active investments with Binance Australia Derivatives, will be closed by April 21, finally ending the firm’s trading and investment services in Australia.