Regulators all over the globe are tightening their noose around crypto exchanges, such as Binance. There is increasing pressure from regulators and the world’s largest exchange has had to deal with it in a number of jurisdictions that are creating problems for it. Binance was pushed into the corner once more, this time in Australia. The crypto exchange announced that it would be rolling back its options and futures trading services in the country. It has succumbed to regulatory pressure by removing its support of leveraged tokens. This derivatives product enabled traders to open leveraged positions in cryptocurrencies without having to worry about liquidation.
According to the official announcement by Binance, existing users of the exchange in Australia will have 90 days for closing and reducing their positions related to these products. While users will be permitted to prevent margin calls and top-up margin balances, they will not be allowed to open new positions or increase existing ones. Beginning September 23rd, traders will not have the option of closing any of their positions manually and the exchange platform will close any of the remaining ones itself. A total of 90 days have been given, as mentioned earlier, and these begin from September 24th. Binance will make its exit slowly from the derivatives market in Australia.
Earlier this year, the exchange’s futures platform had responded to increasing regulatory oversight by reducing the maximum leverage it offers to 20x from 101x. A pro-regulation approach has been adopted by the exchange and it decided to pull out from its fiat-crypto and peer-to-peer pairs in several jurisdictions, such as Singapore, from the first week of September. Even though the crypto exchange has taken a positive approach when it comes to embracing regulation in the countries where it operates, financial watchdogs and regulatory authorities remain attentive to every move that Binance makes.
As per the latest reports, the US Commodity and Futures Trading Commission (CFTC) has launched an investigation into Binance for possible insider trading and market manipulation. The tussle of the exchange with government authorities is nowhere near a close. The latest developments mean that the crypto exchange is now at the center of an investigation aimed at finding out whether it exploited its clients and took advantage of their activities. According to a spokesperson for Binance, the exchange has a zero-tolerance policy when it comes to insider trading and they also follow a strict ethical code regarding any behavior that could negatively impact the industry or customers.
Binance has been investigated by regulators in a number of jurisdictions, which include Italy, Germany, Singapore, South Africa, Japan and the Cayman Islands. These investigations pertained to operating without a license, money laundering and evading taxes. The exchange has built a force of executives that specialize in compliance and has also withdrawn its products to comply with requirements of different jurisdictions and regulatory pressure. But, the scrutiny appears to have intensified and the exchange seems to be fighting an uphill battle with financial watchdogs and regulatory authorities.