The Australian Securities and Investments Commission (ASIC) is now searching the Australian offices of the leading crypto exchange Binance to investigate the exchange’s derivatives business, Bloomberg reported on Wednesday, citing some people familiar with the matter.
ASIC vs. Binance
The Australian regulator has a financial document called the Target Market Determinations (TMDs), which mandates investment companies to ascertain the type of clients eligible to access a financial product. This way, the agency protects retail investors from potentially losing their funds while trading volatile assets such as cryptocurrency derivatives.
In October 2022, ASIC ordered an asset investment firm to halt offering three cryptocurrency products to retail customers for three weeks. The regulatory watchdog claimed that the investment company violated the requirement of the TMD document.
To comply with the financial regulator, Binance seized offering cryptocurrency derivatives services to its retail customers in February, adding that it would reimburse the affected users. The exchange stated that these affected retail clients could reapply to access the derivatives products only after they step up to being wholesale investors with convincing evidence.
In April, the exchange ultimately shut down its derivatives business in Australia, with ASIC withdrawing its operational license. Still, Australian investors could access Binance’s spot trading services.
The latest report shows that the ASIC has not relented in probing Binance’s operations in the country, as the agency checks the company’s classification of retail and wholesale customers.
An ASIC spokesperson added the agency is “unable to confirm or deny any operational detail such as possible searches.” The individual also said that the “regulator’s review of the company is ongoing.”
Binance’s Regulatory Woes
Over the years, Binance has been faced with regulatory crackdowns from financial authorities in several countries. The exchange recently experienced a legal battle against the United States Securities and Exchange Commission (SEC).
The American agency filed a lawsuit against Binance in the claim that the exchange offered unregistered cryptocurrency securities to U.S.-based investors.
Last week, the German financial authority rejected Binance’s application for permission to offer crypto services in the country.
