Binance will resume offering its futures, options, and leveraged tokens products to Australian crypto traders, the exchange said on Friday.
The local arm of the world’s largest crypto ecosystem, Binance Australia Derivatives, has launched over-the-counter (OTC) derivative products for wholesale customers under its Australian Financial Services Licence.
CFDs are often a more convenient way of trading cryptocurrencies, as it allows traders to speculate on price movements and hedge exposures without having to own or store the real underlying coins in a digital wallet.
Leigh Travers, Director of Binance Australia Derivatives said, “Launching crypto derivatives under an AFSL delivers on our core strategy of becoming a regulated institution in Australia. The Binance Australia Derivatives products will enable wholesale customers the opportunity to hedge their crypto portfolio as well as grow the total size of Australian crypto markets.”
Changpeng Zhao, Chief Executive Officer of Binance added, “To attract the next billion crypto users, Binance is focused on building user trust through regulatory compliance, security, and strategic partnerships. The Australian crypto market is a unique opportunity due to the robustness of the financial services regime”
The move comes nearly 10 months after Binance suspended derivatives trading activities in Australia amid increased regulatory pressure. The crypto exchange, the biggest in the world by volume, also stopped offering crypto derivatives products in Brazil and Hong Kong, to get ahead on compliance as it has drawn scrutiny from regulators worldwide.
For CFDs brokers, the biggest blow has been ASIC’s decision to limit how much leverage they can offer to their clients to juice up bets. Regulated firms have been forced to limit the leverage they offer to a maximum of 30:1.
Additionally, the rules mandate negative account protection, ensuring that customers cannot lose more than their trading stake, avoiding a repeat of the debacle following the 2015 Swiss Franc collapse. Finally, the rules forbid bonuses and other incentives, whether monetary or non-monetary, that may have encouraged overtrading in recent years.
The new rules were introduced in 2020 and effectively harmonize ASIC’s requirements with product approval requirements introduced in Europe by ESMA, which also banned offering binary options and restricted leverage on CFDs.