Australia’s corporate regulator on Thursday cancelled the Australian financial services licence held by an entity trading as cryptocurrency exchange Binance Australia Derivatives.
The move, which was in response to a cancellation request it received from the company a day earlier, will not allow clients to increase their derivatives positions or open new positions with Binance. The regulators have provided clients with a deadline of April 21 to close any existing derivative positions.
The risks associated with trading firms at crypto exchanges such as industry leader Binance have been under great scrutiny since rival FTX collapsed in November. The Australian Securities and Investments Commission (ASIC) said it has been conducting a targeted review of operations of Binance’s financial services business in Australia, including its classification of retail and wholesale clients.
The commission issued its first notice of hearing on the matter on March 29. Binance did not immediately respond to Reuters’ request for comment. “ASIC has repeatedly warned potential crypto users that crypto is risky and complex. Crypto derivatives pose additional risks to consumers through the operation of leverage,” the regulator said in a statement.