Binance Australia Offices Raided by Regulator in Ongoing Derivatives Investigation

Binance Australia offices raided by regulator in ongoing derivatives investigation. Global cryptocurrency exchange faces increasing regulatory scrutiny.

Jul 5, 2023 - 02:58
Jul 5, 2023 - 02:58
Binance Australia Offices Raided by Regulator in Ongoing Derivatives Investigation
Binance Australia Offices Raided by Regulator in Ongoing Derivatives Investigation

Binance's offices in Australia were searched by the country's financial markets regulator as part of an ongoing investigation into the cryptocurrency exchange's defunct local derivatives business. According to reliable sources familiar with the matter, the Australian Securities and Investments Commission (ASIC) conducted the searches at Binance Australia locations on Tuesday. The individuals, who requested anonymity due to the sensitivity of the information, provided details about the regulatory action.

ASIC's scrutiny of Binance's derivatives operation primarily centers around the classification of retail and wholesale clients by Binance Australia. Back in April, the company had announced the winding down of its local derivatives exchange while keeping the spot platform operational. The decision was prompted by the misclassification of some Australian users as wholesale investors, leading to the closure of their derivatives positions.

A spokesperson for ASIC refrained from confirming or denying the operational specifics, including the searches, while emphasizing that the regulator's review of Binance Australia remains ongoing. In April, ASIC had already canceled Binance Australia's license for its derivatives operation, raising concerns and initiating a thorough investigation.

Binance, the world's largest cryptocurrency exchange, acknowledged the regulatory actions and stated its full cooperation with local authorities. The company is committed to meeting local regulatory standards to ensure compliance and provide its Australian users with a fully compliant platform.

However, Binance has encountered a series of global investigations, leading to several payments providers severing ties with the exchange, citing concerns about regulatory repercussions. In addition to the ASIC probe, French authorities have recently visited Binance's offices in France to investigate alleged illegal provision of digital-asset services and acts of aggravated money laundering. Binance has strongly maintained its adherence to all legal requirements in France and every other jurisdiction where it operates.

The United States Securities and Exchange Commission (SEC) also filed a lawsuit against Binance and its founder, Changpeng 'CZ' Zhao, accusing them of mishandling customer funds, misleading investors and regulators, and violating securities regulations. Binance responded to the SEC action, expressing disappointment and a firm intention to vigorously defend its platform. Furthermore, Binance and Zhao face an additional lawsuit from the Commodity Futures Trading Commission (CFTC).

The ongoing investigations and legal challenges against Binance have significantly impacted its operations globally. Notably, Binance's Australia platform has been cut off from a crucial local currency withdrawal route, further intensifying the challenges faced by the exchange.

As the regulatory scrutiny intensifies, Binance's compliance efforts and its ability to address the concerns raised by various authorities will play a crucial role in determining the future course for the world's largest cryptocurrency exchange.

Also Read: Binance Announces Token Pair Swap to Safeguard Liquidity Amid Regulatory Scrutiny

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