By
Godfrey Benjamin
April 17th, 2024
In its bid to ensure all consumers are adequately protected from any form of market disadvantage, ASIC has consistently warned residents of the dangers associated with dealing in highly speculative assets like crypto.
The Australian Securities and Investments Commission (ASIC) has revoked the license granted to crypto outfit Binance Exchange through its local subsidiary Oztures Trading Pty Ltd to operate as a derivatives broker. According to a press release from the regulator, the revocation was prompted upon request by Binance itself and is billed to take effect immediately.
According to the schedule pointed out by ASIC, Binance is expected to restrict or limit the ability of its clients to increase their derivatives positions as of the 14th of April. In addition, existing positions must have been closed by April 21 after which the exchange is obligated to automatically close such positions.
ASIC said it recently opened an investigation into the activities of Binance in the country as it relates to how it classifies its retail and wholesale clients.
“It is critically important that AFS licensees classify retail and wholesale clients in accordance with the law. Retail clients trading in crypto derivatives are afforded important rights and consumer protections under financial services laws in Australia, including access to external dispute resolution through the Australian Financial Complaints Authority,” ASIC chair Joe Longo said in a statement, adding that the regulator’s “targeted review of these matters is ongoing, including focus on the extent of consumer harms.”
Australia is clearly a leader when it comes to digital currency-related innovation with citizens that are highly crypto-focused. As the dominant market regulator, ASIC has been up to the task of providing an innovation-driven regulation, but with an emphasis on consumer protection.
For reference, the regulator said revoking the license of Binance does not mean the exchange is no longer cleared to provide other services in the country, The commission said Binance’s license to operate as a member of the Australian Financial Complaints Authority will not end until the end of 8 April 2024.
ASIC and Its Broad Crypto Warnings
In its bid to ensure all consumers are adequately protected from any form of market disadvantage, ASIC has consistently warned residents of the dangers associated with dealing in highly speculative assets like crypto.
The regulator said while it continues to bring enforcement actions on the Virtual Assets Service Providers operating in the country, investors need to understand that there are many crypto products and services that are not licensed but are being offered to consumers in the country.
“As we have said before, ASIC supports a regulatory framework for crypto with a focus on consumer protection and market integrity. The final decision as to the regulatory settings is one for Government,” said Longo.
ASIC went on to reveal how it has brought on enforcement actions against some of the major service providers it has indicted in the recent past including Finder Wallet and Block Earner amongst others.
While Binance has been ordered to stop its derivatives offerings, the exchange is bound to compensate users for any associated losses due to its breach of trading license obligations.