Binance has announced that it is closing its derivatives trading feature in Australia. The biggest, yet the most under fire cryptocurrency exchange in the world is currently facing renewed regulatory pressure from governments.
Binance’s latest move wasn’t entirely surprising as it has been facing regulatory clampdown elsewhere as well. Previously, its derivatives trading option has been closed down in the United Kingdom, Germany, Netherlands, Malaysia and a few other countries across the globe. The derivatives trading option is being targeted by regulators especially because of its massive speculative potential and the ability of crypto exchanges to manipulate the process and affect the overall Bitcoin price index.
Kicking in on Friday, the new move means that all Australian users won’t be able to trade on the future trading section of the exchange. They won’t be able to open new positions for all derivatives including Futures, options and leveraged tokens. Existing users will be given 90 days to reduce or end their contracts entirely. The exchange’s cryptocurrency trading business however, will go on, for now. There are reports that governments across the spectrum are working together now to tackle the challenge of the cryptocurrency exchanges and the overall digital currency revolution. It is believed that the stricter controls will soon be announced to rein in many of these exchanges.
Binance is being targeted particularly by the regulatory arms of these governments. Binance’s userbase is the largest in the world and they are often accused of being lax when it comes to implementing key requirements of the financial watchdogs. There have also been reports, albeit unconfirmed that Binance looks the other way in Anti Money Laundering (AML) and Know Your Customer (KYC) matters purposefully and allows shady organizations and individuals to move their money around. A move against Binance is also seen as a show-cause notice for the rest of the crypto sector, forcing them to adopt regulations in a proactive manner.
Binance on the other hand has always stated that it welcomes constructive regulation and has in many cases pre-empted some checks and protocols on its own. However, its Chinese ownership also comes into play many times and it is often dragged into international politics. This is especially true as the West-China conflict becomes more and more pronounced with time. We can therefore expect more restrictions on the crypto exchange in the near future as well as the crypto sector in general.
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