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The financial markets watchdog has searched Binance’s offices in Australia as governments around the world turn up the heat on the biggest cryptocurrency exchange.
The Australian Securities and Investments Commission conducted searches at several Binance Australia locations on Tuesday, people with knowledge of the matter said, asking not to be identified discussing private information. The action was part of an investigation into its now-defunct local derivatives business, according to the people.
Binance founder Changpeng ‘CZ’ Zhao acknowledged on Wednesday that “external pressure” has hurt the company.Credit: Zed Jameson/Bloomberg
Regulatory crackdowns on Binance from Australia to Europe and the US are becoming a drag on its business. The heightened scrutiny has also prompted banking partners such as Westpac to drop Binance, limiting clients’ ability to deposit and withdraw fiat money on the exchange.
At a Twitter Spaces on Wednesday, Binance founder Changpeng ‘CZ’ Zhao acknowledged that “external pressure” has hurt the company. “Many of those things are outside of our control, but short term they have negative impacts on our business,” he said.
The platform’s global share of crypto spot trading fell for a fourth consecutive month in June, reaching a 10-month low of 42 per cent, according to a report from CCData on Wednesday. Binance’s derivatives market share also dropped.
ASIC’s review of the derivatives operation includes Binance Australia’s classification of retail and wholesale clients. The company said in April it would wind down the local derivatives exchange while keeping the spot platform open. The firm previously said it had closed the derivatives positions of some Australian users because they were incorrectly classified as wholesale investors.
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A spokesperson for ASIC, which in April cancelled Binance Australia’s licence for its derivatives operation, said that “we are unable to confirm or deny any operational detail such as possible searches” and added that the regulator’s review of the company “is ongoing.”
Binance said that it’s “cooperating with local authorities” and “is focused on meeting local regulatory standards in order to serve our users in Australia in a fully compliant manner.”