Binance, the popular cryptocurrency exchange, has voluntarily requested to cancel its Australian derivatives license, according to the Australian Securities & Investments Commission (ASIC), following a targeted review that began in February. As a result, Binance’s derivatives clients in Australia will no longer be able to open or increase their trading positions starting April 14, and all remaining positions will be required to be closed out by April 21.
ASIC Chair Joe Longo stated that the review is ongoing and will focus on consumer harms. Binance confirmed that it has chosen to wind down its Binance Australia Derivatives business in response to recent engagement with ASIC, citing approximately 100 remaining derivatives customers.
Binance has been facing increased regulatory scrutiny in recent months, including from the U.S. Commodity Futures Trading Commission, which has raised concerns about anti-money laundering and know-your-customer compliance issues. Binance’s market share has also slipped by 16% in recent weeks, although it remains the dominant exchange in the world by volume, according to research firm Kaiko.
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The regulatory probe in Australia was triggered by an inadvertent compliance issue related to Binance’s use of subsidiaries, including Oztures Trading Pty Ltd. In February, Binance disclosed that a small number of its Australian customers had been classified as wholesale investors, similar to the qualified investor category in the U.S., allowing them to access more sophisticated financial products.
Regulators around the world are expressing concerns about Binance’s high net worth investors. In the U.S., the CFTC has accused Binance of providing preferential treatment to its wealthiest clients, enabling them to bypass U.S. regulations by trading through overseas shell companies or virtual private networks. Similar practices have been reported in mainland China, encouraged by Binance staff and volunteers.
The increased scrutiny on Binance’s practices comes amid a broader crackdown on centralized exchanges by U.S. regulators. The Securities and Exchange Commission has recently warned Coinbase about potential securities charges. Meanwhile, Australia’s top securities regulator has been taking enforcement actions against several crypto firms for alleged violations of Australian law.
The release by ASIC, Australia’s securities regulator, highlighted that Binance group entities have been subject to regulatory warnings and actions from overseas regulators.
