According to the announcement, this is the commencement of its plan to wind down its derivatives product offerings across Europe. Users from these countries will have 90 days to close their derivatives positions from a date to be announced.
While emphasizing the importance of the European market, Binance also highlighted its efforts “towards harmonizing crypto regulations.” It added that this was a positive sign for the industry. “We understand that many regulators at local levels may have their own positions on crypto, and we welcome the opportunity to engage in a constructive dialogue on local requirements,” the statement read.
The Binance purge
These are the latest in a string of offerings Binance has had to suspend in the wake of recent scrutiny.
Earlier this week, Binance announced it would suspend margin borrowing for large cryptocurrencies and their Australian dollar, euro and sterling pairs from Aug 10. By Aug 12, the platform will delist the pairs, canceling all pending orders, and automatically settle any open trades.
The day before, the platform’s CEO, Changpeng Zhao, also announced that the platform would be limiting the maximum leverage for trading cryptocurrency futures for new users to 20 times.
The regulatory difficulties Binance has been experiencing recently can be traced back to when it issued stock tokens in April. Starting with Tesla, these ‘tokenized stocks’ could be worth a fractional amount of the corresponding stock, kept in reserve. However, these offerings alarmed Germany’s financial regulator BaFin. Following the scrutiny that came in the wake of this initial inquiry, Binance recently dropped its stock token offerings.
Although Binance’s initial issue was its stock tokens, this drew further scrutiny from financial watchdogs. The UK’s Financial Conduct Authority (FCA) issued a consumer warning against Binance in June. This was swiftly followed by similar warnings from financial authorities in Japan, Canada, Thailand, Italy, Lithuania and Hong Kong.