Binance is the biggest cryptocurrency exchange in the world.Credit:Bloomberg
ASIC said in a statement that it had issued a notice to the company on March 29,warning that it was considering suspending or cancelling the group’s licence.
ASIC’s notice to the company came just two days after Binancewas accused by powerful US regulator,the Commodities Futures Trading Commission,of multiple wilful breaches of US law.
From April 14,Binance will no longer sell highly complex derivative products to Australian consumers. All consumers will be required to close their positions by April 21.
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ASIC said in a statement that it had been conducting atargeted review of Binance’s financial services business in Australia,including its classification of retail and wholesale clients. That review was sparked by Binance’s announcement in February that it had incorrectly classified retail clients as wholesale clients,who can be sold a range of high-risk products that are banned for retail clients.
“It is critically important that AFS licensees classify retail and wholesale clients in accordance with the law,” ASIC chairman Joe Longo said.
“Retail clients trading in crypto derivatives are afforded important rights and consumer protections under financial services laws in Australia,including access to external dispute resolution through the Australian Financial Complaints Authority.”