Australia Reviews Binance Operations

Binance Australia, a subsidiary of the world’s largest cryptocurrency exchange, Binance, is under investigation by the Australian Securities and Investments Commission (ASIC) after closing derivatives positions of some retail users mistakenly classified as wholesale investors. The regulator is checking Binance Australia’s “classification of retail clients and wholesale clients” after the closure of derivatives trading accounts belonging to some Australian retail investors erroneously classified as wholesale investors.

 

 

Binance Australia’s under Scrutiny

On Feb. 23, Binance announced that the closure was carried out in compliance with Australian laws, and impacted retail customers would not be able to trade derivatives on the platform. Binance said that the affected customers, about 500 in number, were already informed of the restriction, adding that the company was working on a compensation plan.

However, an ASIC spokesperson said that the regulator is aware of Binance Australia’s recent Twitter post and added that the local entity did not inform the regulator of the issue in line with obligations that come with the platform’s Australian financial license.

Binance has been the subject of intense regulatory scrutiny globally, and the company has faced regulatory actions in several countries, including the United States, the United Kingdom, Japan, and Germany, among others. In recent months, several regulators have warned about the risks associated with cryptocurrency investments, and regulators have increased their scrutiny of crypto exchanges.

 

Concerns raised over Binance Compliance

The cryptocurrency exchange has been preparing for increased regulatory oversight and said that it is willing to comply with local regulatory laws. Binance has also said that it is prepared to pay penalties for past regulatory transgressions.

Binance Australia, which was launched in 2020, is a fully regulated digital asset exchange in Australia, and it provides traders with access to a wide range of cryptocurrencies, including Bitcoin, Ethereum, and Binance Coin. However, this incident has raised concerns about the exchange’s regulatory compliance and its adherence to local laws. It remains to be seen how the ASIC investigation will impact the exchange’s operations in Australia.