Binance Australia’s Derivatives Business Under Investigation by Regulator

Australian financial regulators are investigating Binance, one of the world’s largest cryptocurrency exchanges, over its derivatives trading business. The Australian Securities and Investments Commission (ASIC) has issued a statement saying it is looking into whether Binance has complied with local laws and regulations.

Binance offers a range of trading products, including futures, options, and leveraged tokens, which allow users to bet on the future price of cryptocurrencies. However, regulators have expressed concern about the risks of these products, which can be highly volatile and complex.

The investigation is part of a broader crackdown on cryptocurrency exchanges and other digital asset providers in Australia. Earlier this year, ASIC issued new guidelines for cryptocurrency exchanges operating in the country, requiring them to register with the regulator and comply with strict anti-money laundering and counter-terrorism financing rules.

We have already contacted all impacted users and will fully compensate them for their losses incurred while trading derivatives on Binance.

— Binance (@binance) February 23, 2023

Binance has faced similar scrutiny in other countries, including the United States and the United Kingdom. In the US, the Commodity Futures Trading Commission (CFTC) has been investigating Binance’s derivatives trading since last year, while in the UK, the Financial Conduct Authority (FCA) recently banned Binance from operating in the country.

Users will be compensated for any loss incurred due to the force close of positions. Protecting users is #1 priority @Binance.

We will review the situation and see if/when we can re-open futures offerings in Australia. Thank you for your understanding, & please ignore FUD (4). https://t.co/dRG0u8VEuF

— CZ 🔶 Binance (@cz_binance) February 23, 2023

Binance has responded to the ASIC investigation by saying it is committed to complying with local laws and regulations, and that it will work with the regulator to address any concerns. The exchange has also been expanding its compliance team and implementing new measures to prevent money laundering and other illegal activities on its platform.