ASIC (The Australian Securities and Investments Commission) has decided to cancel the derivative license of Binance after carrying out strong research on the company’s operation in the country. It was disclosed in a press release on Thursday.

This means that Australian traders will not be able to increase their derivative position or add up new positions after April 14. Users have to close all their existing derivate positions before April 21 as Binance is set to close the existing positions on that day.

Wholesale investors mistaken as retail investors

ASIC said that this move came after they started taking a “targeted review” of Binance in February. 500 users left Binance after the exchange described that they had been mistakenly labelled as wholesale investors instead of retail investors.

In Australia, a wholesale investor is recognized as someone who is quite experienced in investments and trading and does not require support and protection in the field of investments. 

ASIC also said that Binance has been facing several regulatory restrictions across the globe including the lawsuit faced by Changpeng Zao, Global Binance Exchange CEO from the United States Commodity Futures Commission.

Spot trading still available

An official of Binance said that there is just a small number of users in Binance derivative platform in Australia which comes out to be around 100. They all have been notified about this. Whereas, the company stated that spot trading is still available for the users.