The Australian financial regulator cancelled the licence of controversial crypto trading platform, Binance, last week in the wake of a “targeted review”.
In a decision handed down last Thursday, the Australian Securities and Investments Commission (ASIC) scratched the Binance licence, effectively ending the firm’s crypto derivatives-trading operations in the country.
Binance, the world’s largest crypto-trading enterprise, acquired its Australian Financial Services Licence through the back door in January last year after buying the existing Oztures Trading business.
Under the ASIC order, Binance Australia must close all still-open client derivatives trading positions by April 21.
The Australian move follows a US Commodities Futures Trading Commission legal action launched at the end of March alleging multiple regulatory breaches by Binance global chief, Changpeng Zhao, various entities in the group and former compliance head, Samuel Lim.
Joe Longo, ASIC chair, said the regulator had consistently warned Australian investors about the risks of crypto-trading while also of late pinging several businesses operating in the sector.
“It is critically important that AFS licensees classify retail and wholesale clients in accordance with the law. Retail clients trading in crypto derivatives are afforded important rights and consumer protections under financial services laws in Australia, including access to external dispute resolution through the Australian Financial Complaints Authority,” Longo said in a statement.
“Our targeted review of these matters is ongoing, including focus on the extent of consumer harms.”
Despite being stripped of its licence, the Binance Australia business must remain a member of the Australian Financial Complaints Authority until April 8 next year under the ASIC ruling.
The crypto platform giant opened a NZ shop last year, trading under the Investbybit (IBB) entity, which is registered in the country “to provide a range of financial services and is a member of the Insurance & Financial Services Ombudsman Scheme”, the Binance NZ site says.
“IBB is not licensed by a New Zealand regulator to provide these financial services,” the website says. “IBB’s registration on the New Zealand register of financial service providers or membership of the Insurance & Financial Services Ombudsman Scheme does not mean that IBB is subject to active regulation or oversight by a New Zealand regulator.”
Binance faces ongoing regulatory challenges in many jurisdictions but the business with no fixed abode has grown exponentially, regardless.