Binance ASF License Canceled
Binance ASF License Canceled

The Australian Securities and Investments Commission (ASIC) has canceled the financial services license of the world’s largest cryptocurrency exchange, Binance. The decision came after ASIC found that Binance had incorrectly classified hundreds of retail customers as wholesale investors, meaning they were not afforded the same consumer protections as retail investors. 

The Australian Securities and Investments Commission (ASIC) has canceled the financial services license of Binance

Binance’s license only permits it to offer derivatives products to professional investors, but ASIC found that retail investors had been able to access these products. From 14 April, Binance clients will not be able to increase derivatives positions or open new positions and must close any remaining open positions by 21 April. Binance can remain an Australian financial complaints authority member until 8 April 2024.

ASIC has repeatedly warned that many cryptocurrency products and services are not regulated and has urged users to be prepared to lose any funds they invest. The regulator has also been strengthening its cryptocurrency team to regulate more digital assets by classifying them as financial products, a move that would make selling them to Australians more difficult. 

Before we go any further, we suggest reading our brokerage reviews on Trade Capital Markets, Astra Horizon, and Dripcoin.

Odd Timing For License Cancelation

Binance and its CEO, Changpeng Zhao, are being sued in the US by commodity market regulators in a complaint that claims the defendants committed “wilful evasion of US law.” The complaint alleges that Binance has grown its US business despite publicly stating its intent to block US customers from accessing the platform.

Binance has been operating in Australia for several years, but its now-canceled license was with Oztures Trading, a company it acquired last year. The cancelation of Binance’s license comes just days after the US Commodities Futures Trading Commission accused the exchange of operating an illegal exchange. In November, Dr. Angel Zhong, an associate professor of finance at RMIT, warned that many investors do not know what AFS licenses cover and might assume they cover cryptocurrency exchanges, giving the company more credibility. ASIC has said it supports a regulatory framework for cryptocurrency with a focus on consumer protection and market integrity. Still, the final decision on regulatory settings is up to the government.

If you’re having issues with withdrawals, contact our team of CipherTrace crypto analysts for assistance.

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