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Amitoj Singh is CoinDesk’s regulatory reporter covering India. He holds BTC and ETH below CoinDesk’s disclosure threshold of $1,000.
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Australian Securities and Investments Commission (ASIC), is conducting a targeted review of Binance Australia’s derivatives business, the regulator said on Friday.
The development comes a day after Binance said that it had incorrectly tagged 500 Australian users as “wholesale investors,” resulting in their derivative positions being unceremoniously closed. Local regulations do not allow retail traders to trade futures and financial derivatives.
Binance said that it had already contacted all impacted users and would fully compensate them.
The review by the Australian markets regulator, includes the entity’s “classification of retail clients and wholesale clients,” an ASIC spokesperson said.
“ASIC is aware of Binance’s social media posts overnight stating that it had incorrectly classed a group of Australian consumers as wholesale investors. It has not yet reported these matters to ASIC in accordance with its obligations under its Australian Financial Services Licence.”
Binance did not immediately respond to CoinDesk’s request for comment.
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Amitoj Singh is CoinDesk’s regulatory reporter covering India. He holds BTC and ETH below CoinDesk’s disclosure threshold of $1,000.
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Amitoj Singh is CoinDesk’s regulatory reporter covering India. He holds BTC and ETH below CoinDesk’s disclosure threshold of $1,000.
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The Australian Securities and Investments Commission (ASIC) is undertaking a review of Binance Australia’s derivatives services. The review follows concerns over cryptocurrency derivative trading, which has grown rapidly since 2018.
Binance Australia, one of the world’s largest cryptocurrency exchanges and a subsidiary of the Binance global exchange, began offering derivative services to clients in February of this year. The services it provides include bitcoin and Ethereum perpetual contracts with up to 100x leverage.
The commission is conducting a review for the purposes of determining if Binance Australia’s derivatives services comply with Australian market licensing, financial crimes and consumer protection regulations. This review is important as it will ensure that investors are adequately protected when engaging in derivatives trading.
The review is also important for Binance Australia as it could eventually lead to the issuer receiving the coveted Australian Derivative Exchange Licence. Having such a licence would be beneficial to Binance Australia’s reputation, as it would demonstrate its commitment to adhering to relevant market regulations and building customer trust.
It is not yet known when the review by the ASIC will be concluded, however, the Australian market regulator has stated that it will work to ensure that the review is completed in a timely manner.
In the interest of promoting investor protection within the derivatives markets, this review by the ASIC is an important step forward. It is hoped that the review will result in a positive outcome for Binance Australia, leading to the issuer receiving the necessary licence and the cryptocurrency derivatives market continuing to expand in a safe and regulated manner.
