The Australian Securities and Investments Commission (ASIC), the regulatory authority responsible for overseeing financial markets in Australia, has reportedly conducted searches at the offices of Binance Australia.
This development comes as ASIC expands its investigation into the exchange’s derivatives operations, focusing on the misclassification of retail and wholesale clients. The news of the raid emerged shortly after Binance Australia announced a special offer in collaboration with Koinly. The offer aimed to simplify and streamline crypto tax reporting for users, ensuring a quick, simple, and reliable process.
Leverage the power of Koinly to make your crypto tax reporting quick, simple and reliable. Exclusive to Binance users, enjoy a 30% discount on your first Koinly tax report. Get the details here to take advantage of this amazing offer 👉 https://t.co/VlmrxvmdEr pic.twitter.com/zLx8mqYtvo
— Binance Australia (@Binance_AUS) July 4, 2023
ASIC’s investigation into Binance Australia
Binance, the world’s largest cryptocurrency exchange, is facing multiple investigations across different jurisdictions. Outside of Australia, the U.S. Securities and Exchange Commission (SEC) has accused Binance of mishandling customer funds and violating securities regulations.
In February, ASIC confirmed its investigation into Binance Australia’s misclassification of retail investors as wholesale, a classification determining the regulatory protection level.
Our team identified a small number of Australian users who were incorrectly classed as ‘Wholesale Investors’ on Binance.
As per Australian regulation, we were required to inform these users and close any of their own derivative positions with immediate effect.
— Binance (@binance) February 23, 2023
The company’s misclassification of clients potentially exposed them to lower regulatory safeguards. ASIC has neither confirmed nor denied the operational details, including the possibility of searches, as the investigation is ongoing.
Binance Australia announced the closure of its local derivatives exchange in April while maintaining its spot platform. Binance has recently stated that it works closely with local authorities and prioritizes compliance with local regulatory standards. The company remains committed to serving its Australian users fully compliantly.
Binance’s regulatory challenges extend beyond Australia. French authorities visited Binance in France last month to investigate the alleged illegal provision of digital-asset services and suspected acts of aggravated money laundering. Binance maintains that it adheres to all applicable laws in France and other markets.
Additionally, the SEC in the United States has accused Binance and its founder, Changpeng ‘CZ’ Zhao, of mishandling customer funds, misleading investors and regulators, and violating securities regulations. Binance expressed disappointment with the SEC’s actions and pledged to defend its platform.
Operational impact on Binance Australia
The regulatory scrutiny faced by Binance has had tangible effects on its operations in Australia. The exchange’s Australian platform has been cut off from a crucial local currency withdrawal channel, which has impacted its ability to facilitate seamless transactions for users in the country. Binance Australia continues to navigate these challenges.