Binance restricts derivative products in Hong Kong amid global crackdown
- Binance is the first major cryptocurrency exchange to proactively restrict access to derivatives products for Hong Kong users.
- Users have 90 days grace period to close open positions on the derivatives exchange.
- The exchange closed down its derivative products offerings in Germany, Italy, and the Netherlands in the past week.
The crypto exchange's move was in line with its commitment to compliance. Regulators shut doors for Binance in Japan, Malaysia, Italy, and the Cayman Islands, amidst rising concerns of its unauthorized operations.
Binance shut derivatives trading in Hong Kong in line with commitment to compliance
Binance officially announced that the exchange is restricting access to derivatives products to Hong Kong users. This move comes after the leading digital asset exchange pulled its derivatives trading in Europe (Germany, Italy, and the Netherlands) and ceased crypto margin trading on sterling, the Euro, and the Australian dollar.
The latest announcement reads:
With immediate effect, users from Hong Kong will not be able to open new derivatives products accounts. Also, going into effect from a date to be announced at a later notice, users from Hong Kong will have a 90 days grace period to close their open positions. During the grace period, no new positions may be opened.
The exchange is yet to set a date when the restrictions will take full effect (when the grace period will begin). Changpeng Zhao (CZ), CEO of Binance, tweeted,
New Binance users from Hong Kong can no longer open futures accounts and we will wind-down access for existing users.
— CZ Binance (@cz_binance) August 6, 2021
This is one of many proactive measures Binance is taking to help establish crypto compliance best practices worldwide.https://t.co/D1JKx52O7T
Over recent months regulators have voiced concerns for consumer protection and the standard of anti-money laundering (AML) checks at cryptocurrency exchanges and increased pressure on Binance.
Binance is currently facing regulatory challenges and has received warnings from authorities in the UK, Thailand, Singapore, and the Cayman Islands. The exchange's proactive move is to comply with regulations and roll back high-risk services offered to traders.
CZ apologized to traders for short-term pain from the turn of events in a recent tweet
Short term pain (apologies ), long term gain.
— CZ Binance (@cz_binance) August 6, 2021
Leading in volume, leading in compliance .
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
