ASIC cancels AFS license of Binance Australia Derivatives

The Australian Securities and Investments Commission (ASIC) today cancelled the Australian financial services licence held by Oztures Trading Pty Ltd trading as Binance Australia Derivatives. The licence cancellation was effected today in response to a request to cancel received from Binance yesterday.

Following the cancellation:

• with effect from 14 April 2023, clients will not be able to increase derivatives positions or open new positions with Binance;
• Binance will require clients to close any existing derivative positions before 21 April 2023;
• on 21 April 2023, Binance will close any remaining open positions.

The terms of the cancellation include a provision that that the cancellation has no effect on the requirement for Binance to continue as a member of Australian Financial Complaints Authority until the end of 8 April 2024.

ASIC has been conducting a targeted review of Binance financial services business in Australia, including its classification of retail and wholesale clients. On 29 March 2023, ASIC issued a notice of hearing under s915C of the Corporations Act 2001 to consider whether ASIC should cancel or suspend the AFS licence held by Oztures Trading Pty Ltd.

Oztures Trading Pty Ltd holds an AFS licence with authorisations to:

• issue and make a market in derivatives and foreign exchange contracts,
• deal in specified financial products on behalf of another person and
• provide financial product advice in specified financial products
• to retail clients and wholesale clients.

Ownership of the licensee changed in January 2022 and it commenced offering derivatives as Binance Australia Derivatives in around July 2022.

On 27 March 2023, the Commodities Futures Trading Commission (CFTC) announced that it had filed a civil enforcement action in the U.S. District Court for the Northern District of Illinois charging Changpeng Zhao, Chief Executive Officer of the Binance Group, and three entities that operate the Binance platform with numerous violations of the Commodity Exchange Act (CEA) and CFTC regulations. The complaint also charges Samuel Lim, Binance’s former chief compliance officer, with aiding and abetting Binance’s violations.

Binance group entities have been the subject of regulatory warnings and action from a number of overseas regulators. In addition to the CFTC, these include regulators such as the UK Financial Conduct Authority (FCA), and Italy’s CONSOB.