Binance to Wind Down Hong Kong Derivatives Trading in Switch to 'Proactive' Compliance Stance
Regulators worldwide have said the exchange isn't authorized to conduct regulated activities in their countries.
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Binance CEO Changpeng Zhao.
Binance, the crypto exchange that has come under scrutiny from regulators globally, said it will take a more proactive stance to compliance and stopped Hong Kong clients from opening new derivates accounts, effective immediately.
- Existing Hong Kong account holders have 90 days to close their open positions, the exchange announced Friday.
- Earlier in the day, CEO Changpeng "CZ" Zhao said in a tweet that the exchange would take a more proactive approach to compliance.
- The exchange also recently reduced the maximum leverage users can use to trade futures contracts from 100 times to 20 times.
- Also in July, Hong Kong's Securities and Futures Commission (SFC) said that no entity in the Binance Group is registered to conduct any regulated activity in Hong Kong. The commission expressed particular concern about stock tokens.
- Zhao responded to these pressures last month in an open letter in which he described regulatory compliance as a "journey," likening its development to those of the automobile industry where "laws and guidelines were developed along the way."
- The Binance chief subsequently announced that a new CEO was being sought with a strong regulatory background as his replacement.
UPDATE (AUG. 6, 9:27 UTC): Adds H.K. derivatives decision to headline, first paragraph.
UPDATE (AUG. 6, 9:57 UTC): Adds Binance's recent actions, expands on global regulatory pressure.
UPDATE(AUG. 9, 10:50 UTC): Removes reference to FTX in fourth bullet point.
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