Binance has announced that, with immediate effect, users from Australia will be restricted from opening new accounts for options, margin products, and leveraged tokens.
Users from Australia were already restricted from opening new futures accounts since 2021-07-08, but the cryptocurrency exchange expanded the restriction following ASIC’s warning of unlicensed firms providing services to retail customers.
“Binance will be one of the first major cryptocurrency and digital assets exchanges to proactively restrict access to derivatives products to Australian users, in-line with our commitment to compliance and our plans to become a regulated financial institution”, the firm stated.
“Our aim is to create a sustainable ecosystem around blockchain technology and digital assets, and we hope that such efforts will help the industry grow in the local market in the long-run”.
The Australian Securities and Investments Commission (ASIC) told Australian investors to be wary of unlicensed entities for their lack of protection.
ASIC recommends investors to only deal with entities that hold an Australian financial services (AFS) license or an Australian market license (AML).
Financial services advisors or dealers in Australia are required to be authorized by ASIC. Financial products include derivatives such as options, futures, leveraged tokens, and binary options.
ASIC has received several complaints from Australian residents who have experienced significant losses due to excessive leverage, platform outages, or unfair liquidations using unlicensed platforms to trade crypto-asset-related financial products, such as options and futures.
While some unlicensed entities have taken steps to prevent Australian clients from accessing their services – including warnings and disclosures as well as geo-blocking – many continue to willfully engage with retail investors from Australia.
“Dealing with licensed entities ensures that you have the benefit of specific obligations and investor protections imposed on these entities under the Corporations Act, that would not be applicable to an unlicensed provider”, the regulator explained. “If an entity is unlicensed, you are taking a risk that you will not be afforded with the investor protections required of licensed providers”.
In recent weeks, financial watchdogs across the world began a crackdown on cryptocurrency trading platforms that were targeting their jurisdictions without proper licenses.
Binance was among the many firms facing regulatory pressure. The largest crypto venue has recently seen its US chief executive quit amid the global crackdown.
The firm has already rolled back its futures and derivatives business in Hong Kong and exited the derivatives space in Europe after pressure from many other countries, including the United Kingdom and Malaysia.
Still, the firm plans a major overhaul post its regulatory woes in order as its CEO maintains his desire to go public one day.
