Australian Regulators Launch Probe Into Binance’s Derivative Business Following Goof Up

Binance News: The leading crypto exchange has run into problems with the Australian Securities and Investments Commission (ASIC) while already dealing with regulatory issues in the United States. On Thursday, Binance liquidated the derivatives holdings of a number of traders who had been mistakenly categorized as “wholesale investors.” The corporation later disclosed its plans to provide compensation to the users who have been adversely affected by the action.

Aussie Regulators Review Binance

The ASIC has said that it will conduct a targeted assessment of the local crypto derivatives business of Binance, which is the most significant cryptocurrency exchange in the world. Binance’s categorization of “retail clients and wholesale clients,” according to a statement released by the regulator on Friday, is one of the aspects that is being looked into as part of the review.

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The ASIC does not permit regular individuals to engage in trading derivatives in any capacity. As a result, in order to trade in futures, customers of Binance are required to provide documents confirming that they are wholesale investors. However, due to Binance’s recent actions, the Aussie regulators have taken notice and are currently undertaking rigorous scrutiny over the KYC and customer onboarding process carried out by the exchange.

According to reports, the trading platform, headed by Changpeng Zhao, has not yet reported these concerns to ASIC in accordance with the obligations outlined in its Australian financial services license. However, while speaking on the development, Zhao was quoted as saying, “we will review the situation and see if/when we can re-open futures offerings in Australia”.

Binance’s Growing Legal Troubles

Following the failure of the FTX exchange a year ago, regulators have increased their oversight of the cryptocurrency industry. As a result, the top digital asset exchange has catapulted into the center of attention. Investigations are currently being conducted by multiple regulatory agencies into Binance’s global operations as well as its platform in the United States.

In response to this specific piece of Binance news, the native token of the exchange, BNB, experienced widespread criticism and FUD. As things stand right now, the price of BNB is trading at around $306.33, which represents a decrease of 0.71% in the past hour and a decrease of 1.10% over the course of the last twenty-four hours.

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Pratik Bhuyan
CoinGape