Australian Regulators Strip Binance Australia of Financial Services License Over Misclassification of Clients

Australian Regulators Strip Binance Australia of Financial Services License

Crypto News

Binance Australia has lost its financial services license after regulators found the cryptocurrency exchange had misclassified retail and wholesale clients, allowing retail customers to purchase high-risk products meant for wholesale customers.

The Australian Securities and Investments Commission (ASIC) launched an investigation, and conversations about suspending or canceling Binance’s license had been ongoing since March 29.

ASIC Chair Joe Longo said that AFS licensees must follow the law and classify retail and wholesale clients correctly. Clients who trade in crypto derivatives should have consumer protections, Longo said.

Australian clients of Binance must begin unwinding their derivative investments, and Binance has until April 21 to close all derivative positions. This action follows a similar probe by the US Commodity Futures Trading Commission into Binance and its CEO Changpeng Zhao.

Binance is also under investigation by authorities in several other countries, including the UK, Japan, Italy, Singapore, the Netherlands, Canada, and Thailand.

ASIC has been assessing the risks associated with cryptocurrencies and has warned consumers about investing in unregulated products and services. Binance Australia customers can still use its spot exchange product. The company did not immediately respond to requests for comment.

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