License for Binance Australia Derivatives - AFS revoked
ASIC revoked the authorization of Oztures Trading Pty Ltd, doing business as Binance Australia Derivatives authorization, to provide Australian financial services (Binance). In response to a cancellation request received from Binance yesterday, the license was revoked yesterday.
In the wake of the cancellation:
Clients won't be able to increase their derivatives positions or open new positions with Binance as of April 14, 2023. Binance will also require that clients close any current derivative positions before April 21, 2023, after which it will close any open positions.
The terms of the cancellation include a clause stating that Binance must continue to be a member of the Australian Financial Complaints Authority through the end of 8 April 2024.
ASIC has looked closely at how Binance's financial services business in Australia divides its customers into retail and wholesale clients.
In accordance with Section 915C of the Corporations Act of 2001, ASIC published a notice of hearing on March 29, 2023, asking for comments on whether to suspend or revoke Oztures Trading Pty Ltd.'s AFS licence.
AFS licensees must categorise retail and wholesale clients in accordance with the law, according to ASIC Chair Joe Longo. Under Australian financial services laws, retail clients trading in cryptocurrency derivatives are given significant rights and consumer protections, including access to external dispute resolution through the Australian Financial Complaints Authority.
According to Mr. Longo, "Our targeted review of these issues is ongoing, with a focus on the scope of consumer harms."
The complexity and risk of cryptocurrencies have been repeatedly highlighted by Crypto ASIC to potential users. Consumers are exposed to additional risks due to the use of leverage in cryptocurrency derivatives.
ASIC does not regulate many cryptocurrency goods and services. Users of cryptocurrencies should be aware that they could lose all of their investments, more so than with other kinds of investments.
"ASIC supports a regulatory framework for cryptocurrencies with a focus on consumer protection and market integrity, as we have previously stated.” According to Mr. Longo, the government has the final say in the regulatory settings.
ASIC filed civil penalty proceedings in the Federal Court on December 15, 2022, against Finder Wallet Pty Ltd for alleged conduct that was not authorised and for failing to adequately disclose risks in connection with the Finder Earn product.
On November 23, 2022, ASIC filed civil penalty proceedings in the Federal Court against Block Earner for engaging in conduct that was illegal with respect to its products based on digital assets.
On October 25, 2022, ASIC filed a civil penalty action in the Federal Court against BPS Financial for allegedly making false statements and acting without a licence in connection with the digital currency "Qoin."
To recall, Oztures Trading Pty Ltd has the following authorisations under its AFS licence:
Issue and market derivative and foreign exchange contracts, carry on business in certain financial products on behalf of someone else, and give retail and wholesale customers financial product advice in certain financial products.
The licensee's ownership changed in January 2022, and around July 2022, it started selling derivatives under the name Binance Australia Derivatives.
Under Australian financial services laws, retail customers are given significant rights and consumer protections, including:
Access to the licensee's internal dispute resolution system; access to the Australian Financial Complaints Authority's external dispute resolution process; arrangements to make up for loss or damage suffered by retail clients as a result of licensee obligations being broken; general advice warnings and statements of advice where personal advice is given; product disclosure statements and financial services guides; and rights and protections relating to a product intervention.
The Commodities Futures Trading Commission (CFTC) has accused Changpeng Zhao, the chief executive officer of the Binance Group, and three businesses that operate the Binance platform of numerous violations of the Commodity Exchange Act (CEA) and CFTC rules. This accusation was made public on March 27, 2023. In the complaint, Samuel Lim, who used to be Binance's chief compliance officer, is also accused of encouraging the company to break the law.
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