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Binance Australia derivatives business reviewed by regulator

Binance incorrectly classed a group of Australian consumers as wholesale investors



Billionaire Changpeng Zhao’s digital-asset exchange has been under the spotlight as regulators step up scrutiny of the crypto industry following the collapse of the FTX exchange last year.
Image Credit: REUTERS

Sydney: The Australian Securities and Investments Commission said it’s conducting a “targeted review” of the local derivatives business of Binance, the world’s largest crypto exchange.

The review includes Binance’s “classification of retail clients and wholesale clients,” a spokesperson for the regulator said in a statement on Friday.

Binance earlier tweeted it had closed the derivatives positions of some Australian users because they were incorrectly classed as wholesale investors. The company said it will compensate affected customers for any losses incurred. In a statement, a Binance representative said 500 users were impacted and that the closure was necessary to comply with local laws.

The ASIC spokesperson said the regulator “is aware of Binance’s social media posts overnight stating that it had incorrectly classed a group of Australian consumers as wholesale investors.”

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

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A Binance spokesperson said the exchange is “committed” to following all relevant Australian laws.

Billionaire Changpeng Zhao’s digital-asset exchange has been under the spotlight as regulators step up scrutiny of the crypto industry following the collapse of the FTX exchange last year. Binance’s global business and a US platform are the subject of a web of regulatory probes.

Zhao said earlier Friday before the ASIC statement that “we will review the situation and see if/when we can re-open futures offerings in Australia,” adding “please ignore FUD.”

FUD is shorthand for fear, uncertainty and doubt “- a phrase used to describe the waves of anxiety that can flare up in crypto in the wake of last year’s market rout and a series of corporate blowups.

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