- Bitcoin prices on Binance’s Australian platform dropped A$9,000 below rival exchanges due to customers rapidly liquidating positions.
- The Australian Securities and Investments Commission (ASIC) initiated a review into Binance Australia’s derivatives business.
- Amidst the regulatory challenges, Binance voluntarily relinquished its financial services license and closed its Australian derivatives business.
Australia-based customers of Binance, the world’s largest cryptocurrency exchange, have been liquidating their Bitcoin holdings at a substantial discount, with prices on the platform falling to almost A$9,000 below those on rival exchanges. This occurred in the wake of the exchange losing its banking partners and facing regulatory scrutiny, prompting a rush to exit among Australian customers.
Earlier this month, Binance revealed it would no longer facilitate Australian Dollar bank transfers using PayID, a development that led to many customers seeking to cash out their positions quickly. Consequently, Bitcoin’s price on Binance Australia dropped to around A$34,000 ($23,062.20), compared with A$43,000 on BTC Markets, a local competitor. Outside Australia, Bitcoin was quoted at $27,790.
The Australian Securities and Investments Commission (ASIC) added to Binance’s challenges by reviewing its derivatives business. This action was prompted by an error on Binance’s part, which led to the misclassification of 500 users as “wholesale investors.” The mistake resulted in the closure of their derivative positions, a move that local regulations mandate for retail traders.
Binance closed its Australian derivatives business after voluntarily relinquishing its financial services license. However, the exchange stated that the closure would not impact Australians using its spot exchange product.
Binance is currently working to find alternative providers to continue offering Australian Dollar deposits and withdrawals. While PayID transfers are no longer possible, Australia-based users can still transact in crypto using their credit or debit cards, and Binance’s P2P marketplace continues to operate normally.
However, the situation in Australia is reflective of Binance’s broader regulatory struggles around the world. It is currently battling legal actions and probes in several jurisdictions, including the UK, Japan, Italy, and Singapore, where it faces legal action from the US Commodity Futures Trading Commission.
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