Binance to Shut Down Derivatives Trading in Hong Kong
- The exchange revealed its plans only a week after it announced it will be scaling down its support for derivatives in Europe.
- Changpeng Zhao, Binance CEO, explained that in order to establish “crypto compliance best practices”, the exchange was now going to take a more proactive approach to compliance.
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Popular cryptocurrency exchange Binance is moving away from services that may attract the attention of regulators, and has now restricted the access to its derivatives products to Hong Kong users, the exchange said in a blog post on 6 August.
According to the announcement, Binance has already prohibited the creation of new derivatives accounts in the region. Existing accounts will be given a grace period of 90 days, in which no new positions can be opened, to close their existing positions. The exchange said in its blog post:
“Binance will be the first major cryptocurrency and digital assets exchange to proactively restrict access to derivatives products to Hong Kong users. Our aim is to create a sustainable ecosystem around blockchain technology and digital assets, and we hope that such efforts will help the industry grow in the local market in the long-run.”
Shortly after the announcement, the exchange’s CEO, Changpeng “CZ” Zhao, explained the move was part of Binance’s attempt to have a more “proactive” approach to compliance. The exchange already started the process of scaling down its futures and derivatives products in Europe last week, with users in Germany, Italy, and the Netherlands no longer having the option to open such accounts.
The exchange has also taken other steps to avoid regulatory scrutiny, such as limiting crypto margin trading with the sterling, euro, and Australian dollar. Binance also followed in the steps of FTX exchange in lowering its maximum leverage limit to only 20x. Back in July, the exchange also began withdrawing its support for stock tokens, and holders were given 90 days to liquidate their stock token positions.
- The popular crypto exchange has decided to sell its business in Russia to CommEX, a crypto exchange business that was officially launched on Tuesday.
- Binance noted that it will fully exit the Russian market, and have no ongoing revenue split or any option to buy back shares in the business.
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- The company said it will be suspending its crypto-backed debit card service in the Middle East on 25 August, and in Latin America by 21 September.
- Although no reason was given for the decision, the company noted that “less than 1% of users” in those regions will be affected by the change.
- A spokesperson said the change was due to the “changing market and user needs”, and that Binance will now be refocusing its resources on its main products and long-term goals.
- Launched in March 2022, Binance Connect helped crypto businesses connect with the traditional finance system, and supported 50 cryptocurrencies and networks such as Visa and Mastercard.