Australian Regulator Cancels Binance’s Derivatives Business License

The derivatives exchange of Binance, catering to the crypto investors of Australia, has decided to shut down its doors. The firm has made an official announcement on the matter, confirming that it has plans to go out of commission before the end of the current month.

The firm has also informed the users that all the derivatives positions of its consumers are going to be closed before the 21st of April. To this end, The Australian Securities and Investments Commission or ASIC has revoked the derivative exchange license for Binance.

The request was extended by Binance officials on 5 April, as per media reports. At present, Binance derivatives exchange in Australia has a total of 104 users. These data projections are shared by Binance exchange CEO CZ in the latest tweet update.

He has informed the users that the spot exchange platform in Australia is going to keep operating as usual. The officials at Binance Australia have told the media that the firm is clamping down on the current endeavor to undertake more focused projects.

Importance and Legal Specifications of AFS License

Commenting on the matter, ASIC chief Joseph Longo said that AFS certification is necessary for legally distinguishing the differences between retail and wholesale clients.  He also shared that AFS-compliant exchanges can ensure legal rights that are crucial for the protection of retail investors who are dealing in derivatives products.

He also claimed that this certification ensures that the exchanges are compliant with consumer protection laws and other financial regulations within the Australian jurisdiction.

The trade platforms that are compliant with the AFS licensing are also able to resolve any financial disputes under the guidance of the Australian Financial Complaints Authority. He maintained that the final decision to extend or revoke the AFS license for any firm lies with the government.

He claimed that the role of ASIC is to ensure that the trading platforms are working following the legal requirements and remain within the bounds of a regulatory framework in Australia.

Binance Asks Australia’s Financial Regulator to Terminate its License

Binance exchange is the biggest cryptocurrency exchange platform in the world. The firm was able to become an international force within the span of a few years.

Since crypto is largely unregulated in most countries, therefore Binance has a history of facing regulatory issues in various jurisdictions. The latest rounds of prosecution have come from the Commodity and Futures Trading Commission of the USA.

Last week, CFTC filed a lawsuit against Binance for operating illegal commodities in a surprising turn of events. The lawsuit is also extended to Binance CEO, CZ, and has purported the executive for dealing in unregistered derivatives products within the US jurisdiction.

It is worth noting that Binance Exchange started offering trading services in the USA in 2019 with a headquarters in Florida.

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