According to people familiar with the matter, ASIC’s search of Binance’s premises is part of a probe into client classification on the platform and its local derivatives business. Bloomberg reported that the trading venue is cooperating with local authorities.
Binance Australia Stuck In Derivatives Debacle
Today’s search comes after 500 derivatives positions were liquidated on the platform in February. The issue also reportedly affected user accounts, and some accounts were mysteriously closed down.
Binance Australia announced plans to shut down its local business later in April amid regulatory scrutiny from ASIC and issues with local banking partners. The regulator also revoked the platform’s derivatives license and launched a “targeted review” of Binance Australia’s business. ASIC officials disclosed that the probe was partly to determine how Binance classifies wholesale and retail clients.
Binance is also under heavy scrutiny in jurisdictions across the U.S. and Europe. The company’s office in Paris was stormed by officials investigating allegedly “aggravated money laundering”. Crypto’s leading CEX also pulled back from the U.K. and Cyprus.
German regulators denied the company’s custody license application around the same time that major Euro payment partner Paysafe decided to cut support for bank transactions by September.
In the U.S., the company and CEO Chanpgeng Zhao stand accused of violating federal laws by offering unregistered securities trading to American investors. Zhao or CZ as he’s known by the media, is said to have commingled funds in private entities like Merit Peak.
The company and CZ denied the claims made by the SEC in its June lawsuit.
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