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(Kitco News) -
Binance, the world’s largest cryptocurrency exchange, had their Australian offices searched by the country’s financial markets regulator, Bloomberg reported on Wednesday.
The Australian Securities and Investments Commission (ASIC) conducted searches at multiple Binance Australia locations on July 4, according to sources familiar with the matter who asked not to be identified. The searches are related to Australia’s ongoing probe of Binance’s local derivatives business, which was shut down in April after the ASIC canceled the exchange’s derivatives license.
“We are unable to confirm or deny any operational detail such as possible searches,” a spokesperson for the ASIC said, but acknowledged that their investigation of Binance “is ongoing.”
“We are cooperating with local authorities,” a spokesperson for Binance Australia said. “Binance is focused on meeting local regulatory standards in order to serve our users in Australia in a fully compliant manner.”
The ASIC’s probe of Binance Australia’s derivatives operation includes their classification of retail and wholesale clients after the exchange said it had closed the derivatives positions of some Australian users because they were incorrectly designated as wholesale investors. In April, Binance announced that it would shut down their Australian crypto derivatives exchange, but the spot platform has continued to operate.
The legal and regulatory woes for Binance continue to mount in jurisdictions around the world.
On June 16, it was revealed that French authorities have been investigating the exchange for money laundering since February 2022.
The Judicial Investigation Service of Finance has been conducting a preliminary investigation into the exchange for the “illegal exercise of the function of service provider on digital assets (PSAN),” and for “acts of aggravated laundering, by competition for investment operations, concealment, conversion, the latter being carried out by offenders who have generated profits.”
As a requirement to operate in the region, Binance is mandated to obtain an operating license, which it failed to do, leading regulators to charge the platform with illegally offering its services to French customers. All cryptocurrency exchanges operating in the country have been required to obtain approval from the Financial Markets Authority (AMF) since 2019. Binance has reportedly been operating in France since 2020 but only received AMF approval in May 2022.
Binance Global has faced similar accusations in the U.S., where the Securities and Exchange Commission (SEC) has accused the exchange of providing services to American customers illegally, and in some cases, even coached users on how they could find a workaround to a KYC check. The SEC estimates that in August 2021, only 25 million of the 62 million Binance users from around the world had completed proper KYC.
On June 5, the SEC filed 13 charges against Binance for a variety of violations, including operating an illegal platform in the U.S. and misusing customer funds.
On June 16, Binance announced that it will be leaving the Dutch market. Binance said that following its announcement, no new users residing in the Netherlands will be able to register, and existing Dutch resident users will only be able to withdraw assets from the Binance platform.
“Binance has been in a comprehensive registration application process as a virtual asset service provider (VASP) with the Dutch regulator,” the announcement said. “Although we explored many alternative avenues to service Dutch residents in compliance with Dutch regulations, unfortunately this has not resulted in a VASP registration in the Netherlands at this time. Binance will continue striving to obtain authorizations to provide our products and services to users in the Netherlands.”
Dutch users have been encouraged to withdraw all assets from their Binance accounts.
And on June 14, the exchange revealed its plans to exit the Cyprus market after the Cyprus Securities and Exchange Commission put Binance Cyprus “under examination for application for deregistration” on its website.
“We are working hard to prepare our business to be fully compliant with MiCA [Markets in Crypto-Assets] when it is implemented in the next 18 months,” Binance said in response to the development. “To that end, we have made the decision to pull back efforts in Cyprus to focus on our efforts on fewer regulated entities in the EU, especially our larger registered markets.”
