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.