MIU - Issue 147 - April 2023

Binance Australia’s AFS licence cancelled

ASIC has cancelled the Australian financial services (AFS) licence held by Oztures Trading Pty Ltd trading as Binance Australia Derivatives (Binance). The licence cancellation was effected on 6 April 2023 in response to a request received from Binance.

Following the cancellation of Binance’s AFS licence:

  • clients were no longer able to increase derivatives positions or open new positions with Binance from 14 April 2023
  • Binance required clients to close any existing derivatives positions before 21 April 2023
  • Binance closed any remaining open positions on 21 April 2023.

The terms of the cancellation include a provision that the cancellation has no effect on the requirement for Binance to continue as a member of Australian Financial Complaints Authority until the end of 8 April 2024. 

Binance group entities have been the subject of regulatory warnings and action from several overseas regulators, including the Commodities Futures Trading Commission.

This follows our targeted review of Binance financial services business in Australia, including its classification of retail and wholesale clients. Our review of Binance’s financial services business in Australia is ongoing and includes a focus on the extent of consumer harms.

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ASIC and IOSCO report on combatting retail market misconduct

On 31 March 2023, the International Organization of Securities Commissions (IOSCO) published a report calling for greater international collaboration and cooperation to combat cross-border scams, greenwashing, misconduct, and fraud.

The report was produced by IOSCO’s Retail Market Conduct Task Force. We co-chair the task force with the Central Bank of Ireland.

The report provides a global point-in-time view on the evolving retail trading environment, and outlines a suite of measures for regulators to consider involving:

  • supervisory and enforcement issues emerging from cross-border offerings, and the need to enhance cooperation frameworks
  • conduct and fraud implications emerging from recent crypto-asset trading trends
  • increased greenwashing risk and the need to better identify compliance with climate disclosure standards
  • the impact of social media and finfluencer activity on retail decisions and behaviour, and the need to heighten regulators’ digital presence and strategies
  • the escalation in unlicensed activity and the surge in self-directed online trading.

This analysis will inform our strategic priorities on retail investor harms concerning crypto-assets, sustainable finance, scams and Australia’s design and distribution obligation laws.

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Permanent injunctions ordered against social media finfluencer Tyson Scholz

The Federal Court has made permanent injunctions against social media finfluencer Tyson Robert Scholz, prohibiting him from carrying on a financial services business in Australia in contravention of the Corporations Act 2001 (Corporations Act).

In December 2022, the Court found Mr Scholz had contravened section 911A of the Corporations Act by carrying on a financial service business between March 2020 and November 2021, without an Australian financial services (AFS) licence.

The court has now permanently prohibited Mr Scholz from:

  • hosting online groups for which a membership fee is charged, and in which messages are exchanged by members about share trades (either in a group chat or through direct messages from Mr Scholz), without an AFS licence
  • carrying on a financial services business in Australia in contravention of the Corporations Act.

Separately, social media influencers should review Information Sheet 269 Discussing financial products and services online, which outlines how financial services laws apply to them.

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Last updated: 27/04/2023 09:54