Australia: ASIC Is Conducting a “Targeted Review” of Binance

Lavina Daryanani
Source: Coin Culture

Just a day ago, screenshots shared on Crypto Twitter showed how Binance closed derivative positions for many Australian users. Right after, Binance said that it had wrongly labeled 500 Australian users as “wholesale investors.” As a result, their positions were abruptly closed.

Furthermore, it clarified that the exchange has gotten in touch with impacted users and will fully repay them for their losses. The positions’ closure was allegedly in tandem with local regulations in Australia. Historically, the top crypto company has not allowed retail traders to trade futures and financial derivatives products. Only “wholesale” traders are allowed to trade such products on Binance Australia.

Also Read: Binance Accidentally Closes Derivative Positions of Few Australian Users

Binance under ASIC’s radar

Now, according to the latest details, the Australian Securities and Investments Commission [ASIC] revealed that it is conducting a “targeted review” of the firm’s local derivatives business.

Also Read: Paxos Ordered To Stop Issuing Binance USD Stablecoin

According to an AISC spokesperson, the review is related to Binance’s “classification of retail clients and wholesale clients.” Additionally, the representative said that the regulator “is aware of Binance’s social media posts overnight stating that it had wrongly classed a group of Australian users as wholesale investors,” and added,

“It has not yet reported these matters to ASIC in accordance with its obligations under its Australian financial services license.”

On the other hand, a Binance spokesperson said that the firm is “committed” to following all relevant Australian laws. In a recent tweet, the firm’s executive CZ said,

“We will review the situation and see if/when we can re-open futures offerings in Australia.”

Since the collapse of FTX, regulators around the world have been increasingly scrutinizing crypto companies. As reported recently, Binance is preparing to pay fines to make up for its past violations. During its early days, the world’s largest exchange was allegedly fueled by engineers who were not familiar with laws and rules related to the risk of bribery and corruption, money laundering, etc. The firm’s Chief Strategy Officer, Patrick Hillmann, expects regulators to impose fines for past conduct.

Also Read: Binance ‘Likely’ To Pay Fine To Settle Past Violations