Australia cancels Binance’s financial services licence amid probe

The Australian Securities and Investment Commission (ASIC) has been conducting a “targeted review” of Binance, first confirmed in February, when Binance said it had misclassified some retail investors as wholesale.

Retail investors are entitled to a higher level of regulatory protection.

ASIC on Thursday cancelled the Australian financial services licence of Oztures Trading Pty Ltd, trading as Binance Australia Derivatives (Binance), in response to a request from the company.

All positions will close by 21 April.

“It is critically important that AFS licensees classify retail and wholesale clients in accordance with the law,” ASIC Chair Joe Longo said in a statement. “Our targeted review of these matters is ongoing, including focus on the extent of consumer harms.”

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The financial services licence authorised Binance to issue derivatives and foreign exchange contracts. Noting many cryptocurrency products and services are not regulated by ASIC, Longo said the regulator supported a “regulatory framework” for the asset class.

Binance said in a statement it had decided to pursue a “more focused approach” in Australia after “recent engagement with ASIC”.

The closure would not impact Australians using its spot exchange product, it added.

The world’s largest cryptocurrency exchange is battling regulatory suits and probes around the world.

ASIC’s statement noted the CFTC suit as well as regulatory actions in the UK, Japan, Italy and Singapore.

Panic withdrawals

According to blockchain data tracker Nansen, last week, investors withdrew $1.6 billion of cryptocurrency from Binance since the US Commodity Futures Trading Commission (CFTC) sued Binance – the world’s biggest crypto exchange – along with its CEO Changpeng Zhao and former top compliance executive, alleging they were operating an “illegal” exchange and a “sham” compliance program.

Martin Lee, research analyst at Nansen, said that the outflows were higher than usual, but still not as high as December 13, when investors pulled $3 billion from Binance as they grew nervous about the status of Binance’s reserves.