Binance, the world’s largest cryptocurrency exchange platform, is winding down its futures and derivatives product offerings in Australia amid a growing crackdown by regulators.
With immediate effect, new users from Australia will no longer be able to open accounts with Binance to trade futures, options and leveraged tokens. As for existing users, Binance said they will have a 90-day grace period to close their open positions. During the grace period, users will be allowed to top-up margin balances to prevent margin calls and liquidations, but they will not be able to increase or open new positions.
“Our aim is to create a sustainable ecosystem around blockchain technology and digital assets. Binance welcomes developments to our industry’s regulatory framework as they pose opportunities for the market players to have greater collaboration with the regulators. We are committed to working constructively in policy-making that seeks to benefit every user,” the exchange said.
The announcement comes shortly after Binance decided to shut down its futures and derivatives business across Asia and Europe. The influential exchange has come under increasing regulatory scrutiny amid concerns about compliance and protection for investors
Binance CEO Changpeng Zhao “CZ” indicated that the move to restrict access to derivatives products in several jurisdictions was ‘proactive’. He also expects Binance to face heavy scrutiny in the future as the influential exchange is shifting from a tech startup to a financial service group.
Binance is facing a growing crackdown on multiple fronts and has been flagged by regulators in other countries before. Most recently, Malaysia’s regulator reprimanded the exchange and its chief executive for operating illegally in the country, despite a previous warning.
In the UK, Britain’s Financial Conduct Authority (FCA) restricted the exchange from carrying out regulated activities in the country. The City watchdog, however, has updated its previous warning to reflect that the UK division of Binance has complied with all the requirements imposed by the FCA.
Despite the regulatory headwinds, CZ said that depending on business growth, the American outpost of the world’s biggest crypto exchange is eyeing a potential IPO route to go public within three years.
Although the company generated $800 million–$1 billion in profit last year, Binance.US is looking at a proper way to get VC money. Namely, CZ expects the US affiliate to close a large private funding round within the next two months in a bid to reduce its dependence on the global parent entity.
