Crypto exchange Binance has Australian financial services licence cancelled by Asic

theguardian.com:

Australia’s financial regulator has cancelled the local financial services licence of the world’s biggest cryptocurrency exchange, Binance.

Earlier this year, the Australian Securities and Investments Commission (Asic) found Binance had incorrectly classified hundreds of retail customers as wholesale investors.

The Asic chair, Joe Longo, said the distinction was important because retail customers have access to more consumer protections under Australian law, including the right to dispute resolution.

Binance’s Australia’s financial services (AFS) licence only allows it to provide derivatives products to sophisticated investors, rather than retail customers.

“It is critically important that AFS licensees classify retail and wholesale clients in accordance with the law,” Longo said.

“Retail clients trading in crypto derivatives are afforded important rights and consumer protections under financial services laws in Australia, including access to external dispute resolution through the Australian financial complaints authority.

“Our targeted review of these matters is ongoing, including focus on the extent of consumer harms.”

Dr Angel Zhong, an associate professor of finance at RMIT, said in November that many investors do not know what AFSLs cover and might assume it would cover cryptocurrency exchanges, giving the company more credibility.

“I think many have this impression that if [the company has] an AFSL … then [they’re] protected, but in fact they’re not really fully protected,” she said.

“[An] AFSL gives you the impression, especially for the general public, that it is legal, but what is legal is not the cryptocurrency, it is the general financial product they are otherwise providing.”

From 14 April, Binance clients will not be