Following a probe by Australia’s corporate watchdog, the largest cryptocurrency exchange in the world was stripped of its financial license, forcing local investors to quickly wind up their holdings.
After receiving a request from Binance, the Australian Securities and Investments Commission (ASIC) disclosed that it had revoked the company’s authorization to provide Australian financial services.
According to the consumer protection agency, “ASIC has been conducting a targeted investigation of Its financial services business in Australia, including its categorization of retail and wholesale clients.”
Binance’s February statement that hundreds of retail customers had been classed as wholesale investors—who can be sold high-risk goods prohibited to retail clients—spurred the study. The investigation of Binance’s operations in Australia, according to ASIC Chair Joe Longo, is still proceeding with a focus on the “extent of consumer harms.”
He stated that it was crucial for AFS licensees to distinguish between retail and wholesale clients in compliance with the rules.
Under Australian financial services legislation, retail clients trading in cryptocurrency derivatives are given significant rights and consumer safeguards, including access to external dispute resolution through the Australian Financial Complaints Authority.
The licence has been revoked and is no longer valid right away. As on April 14, the company will not permit cryptocurrency traders to grow their derivatives positions or add new positions.
Moreover, Binance must close all open derivative positions by April 21. All positions that are still vacant after this date will be filled.
