Binance to Stop Offering Crypto Derivatives Products in Australia

Cryptocurrency exchange giant Binance has been in the crosshairs of global financial regulators in recent times. Following mounting pressure from regulatory watchdogs in different countries, the company seems committed to boosting regulatory compliance.

Binance revealed that it will halt crypto derivatives offerings for customers in Australia by December 2021.

Crypto Derivatives Offerings to Cease Australia

Binance made the announcement on Tuesday (September 21, 2021). The cryptocurrency exchange set a 90-day deadline for existing Australian customers, starting from September 24, to reduce or close their positions on futures, options, and leveraged tokens.

An excerpt from announcement reads:

“Users will be able to top-up margin balances to prevent margin calls and liquidations, but they will not be able to increase or open new positions.”

Binance further said that after December 23, existing crypto users will not be able to manually reduce or close their positions on the aforementioned products, consequently closing all remaining open positions automatically.

The latest development follows a restriction earlier placed on new Australian users, stating that they could not access the same crypto derivatives offerings. In July, Binance also stopped crypto margin trading with the euro, British pound, and Australian dollar.

Binance has also said that it was winding down derivatives products offerings in European countries such as Italy, Germany, the Netherlands. The exchange also took similar action in Hong Kong back in August. The crypto company said that it was carrying out the current action in compliance with local regulators.

Also speaking to CoinDesk on the restriction in Australia, a Binance spokesperson said:

“We proactively review our product offerings and activities on an ongoing basis, against user demand, evolving regulatory requirements, and future opportunities, to determine changes and improvements.”

Binance and its Rough Relationship with Regulators

Meanwhile, the restriction on crypto derivatives offerings in different countries comes as Binance is facing intense regulatory scrutiny. The UK’s Financial Conduct Authority (FCA) back in June issued a warning to Binance Markets Limited (BML), stating that BML is not authorized to operate in the country.

The Monetary Authority of Singapore (MAS), also listed Binance in its investors’ alert list, as one of the companies not licensed by the Singaporean regulatory watchdog. The company subsequently announced that it was stopping trading pairs and payment options in the Singapore dollar (SGD), as well as removing the Binance app from Singapore iOs and Google Play stores.

Earlier in September, South Africa’s Financial Sector Conduct Authority (FSCA) warned the public against the Binance Group, stating that it was not licensed to offer investment advice or operate in the country.

In the US, the Commodity Futures Trading Commission (CFTC) is reportedly investigating the exchange over allegations of insider trading and market manipulation. This is in addition to a CFTC probe seeking to know if Binance allowed US customers to trade derivatives in contravention of the country’s laws.

Amid the regulatory pressure, Changpeng Zhao, CEO of Binance, said that the company needs a “centralized entity” to ensure a better working relationship with regulators globally.

“As we run a centralised exchange, we have come to realise that we need to have a centralised entity to work well with regulators. We need to have clear records of stakeholders’ ownership, transparency and risk controls.”

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