In the wake of a governmental investigation into its business practices, cryptocurrency exchange operator Binance has decided to shut down its Australian derivatives division.
The Australian Securities and Investment Commission (ASIC) announced in February that it was undertaking a “targeted review” of Binance after the exchange admitted that it had mistakenly labelled some retail investors as wholesale.
Retail investors have a greater degree of legal protection at their disposal.
After Binance requested to do so, Oztures Trading Pty Ltd traded as Binance Australia Derivatives (Binance). However, ASIC on Thursday revoked the company’s authorization to provide Australian financial services.
By April 21, all jobs will be filled.
ASIC Chair Joe Longo stated in a statement, “It is critically important that AFS licensees classify retail and wholesale clients in accordance with the law.”
“Our targeted review of these matters is ongoing, including focus on the extent of consumer harms.”
Binance was permitted to issue derivatives and foreign exchange contracts through the financial services licence.
Longo noted that ASIC does not control many cryptocurrency-related goods and services, and the regulator backed a “regulatory framework” for the asset class.
After “recent engagement with ASIC,” Binance said in a statement that it had made the decision to take a “more focused approach” in Australia.
Australians who use its spot exchange product won’t be impacted by the closure, it was noted.
The biggest bitcoin exchange in the world is defending itself against legal actions and investigations everywhere. In a lawsuit filed last month, the US Commodities Futures Trading Commission (CFTC) accused Binance and its creator Changpeng Zhao of running an “illegal” exchange.
The CFTC lawsuit as well as regulatory measures in the UK, Japan, Italy, and Singapore were mentioned in ASIC’s statement.