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Australian Regulator Takes Legal Action Against eToro Over High-Risk and Volatile Trading Products

by Blockchain NewsAugust 3, 2023

The Australian Securities and Investments Commission (ASIC) has filed a case in the Federal Court against the online investing platform eToro Aus Capital Limited about the suitability of eToro’s target market for contract for difference (CFD) products.

The case is being brought about the appropriateness of eToro’s target market for CFD products. The Australian Securities and Investments Commission (ASIC) asserts that eToro’s target market for contracts for difference (CFDs) was far too wide for such a high-risk and volatile trading product, and that the platform used inadequate screening measures, which resulted in violations in the company’s design and distribution duties.

Customers are given the opportunity to speculate on the value of underlying assets via the use of CFDs, which are leveraged derivative contracts. The conduct of eToro, according to ASIC’s assessment, undoubtedly exposed a substantial number of retail customers to CFD products that were not suitable for their investment goals, financial status, or requirements, which resulted in a considerable risk of consumer damage.

Trading contracts for difference (CFDs) resulted in financial loss for roughly 20,000 of eToro’s customers between October 5, 2021 and June 14, 2023. According to the information provided on the eToro website, the majority of retail investor accounts on the platform end up losing money when they trade CFDs.

Sarah Court, the deputy chair of ASIC, expressed her dissatisfaction in what is purported to be a lack of compliance on the part of eToro and stressed that CFD issuers are required to conform with the design and distribution framework.

In addition to this, she emphasized the need of limiting the scope of CFD target markets in order to avoid suffering major financial losses. The Australian Securities and Investments Commission (ASIC) has leveled a number of claims, and eToro has said that the company is exploring how to react.

Since then, the company has made some adjustments to their CFDs target market assessment, and they have stated that there would be no effect on their service or interruption to their overall operation. eToro places a strong emphasis on its commitment to complying with regulatory requirements and working closely with them.

The Australian Securities and Investments Commission (ASIC) has in the past taken administrative action to safeguard customers from high-risk CFD trading, such as placing stop orders against other businesses.

This case highlights regulatory issues about the management of high-risk CFD products as well as the possible hazards that are presented to ordinary investors. As the legal procedures progress, a careful eye will be kept on eToro’s reaction as well as any following steps it takes.

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Binance Trims Employee Benefits and Faces Regulatory Challenges Globally

by Blockchain NewsJuly 18, 2023

According to a recent report by The Wall Street Journal, the global cryptocurrency exchange Binance has reduced several benefits for its employees, including reimbursements for mobile phone usage, fitness, and work-from-home expenses.

The company cited the “current market environment and regulatory climate” as the reasons for this change, which has led to a decline in profit. This suggests that additional cost-cutting measures may be necessary in the future.

A representative for Binance indicated that the company might consider scaling back on certain products, business units, staff benefits, and policies in response to business and regulatory concerns.

In addition, Binance is reportedly planning to lay off between 1,500 and 3,000 employees by the end of the year, according to an anonymous source cited by CNBC. This information came to light around the company’s six-year anniversary on July 14, 2023.

Binance is currently facing legal challenges globally. In the United States, both the Securities and Exchange Commission and the Commodity Futures Trading Commission have initiated legal proceedings against the company.

The lawsuits allege that Binance and its CEO, Changpeng Zhao, offered unregistered securities. Binance has characterized these legal actions as an example of regulation by enforcement.

On July 5, 2023, the Australian Securities and Investments Commission (ASIC) conducted a search operation at the Binance Australia headquarters. This investigation into the now-closed local derivatives division of the crypto-giant is part of the operation, highlighting the increasing regulatory scrutiny Binance is facing.

This follows the decision to cease facilitating PayID AUD deposits by a third-party payment service provider on May 8, 2023.

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Tagged : Asic / Binance / Cftc / Changpeng Zhao / News / SEC

ASIC Raids Binance Australia as Global Regulatory Hurdles Mount

by Blockchain NewsJuly 5, 2023

Binance, recognized as the largest cryptocurrency exchange in the world, is currently facing an increasing number of regulatory issues across various global jurisdictions.

As reported by Bloomberg, the Australian Securities and Investments Commission (ASIC) executed a search operation at the offices of Binance Australia. This operation is a part of an ongoing inquiry into the crypto giant’s now-closed local derivatives business, highlighting the intensifying regulatory scrutiny Binance is encountering.

ASIC, the authority overseeing corporate affairs, markets, financial services, and consumer credit in Australia, has been rigorously examining Binance Australia’s classification of retail and wholesale clients. In April, Binance disclosed its plans to phase out its local derivatives exchange but affirmed the continued operation of its spot platform. However, the same month saw the revocation of Binance Australia’s derivatives operation license.

Fast forward to May 18, 2023, Binance announced via Twitter that it would cease facilitating PayID AUD deposits, attributing the decision to its third-party payment service provider. The firm also indicated potential disruptions to bank transfer withdrawals.

Beyond Australia, Binance’s regulatory woes are expansive. On June 5, 2023, the U.S. Securities and Exchange Commission (SEC) filed charges against Binance Holdings Ltd., its U.S. affiliate BAM Trading Services Inc., and founder Changpeng Zhao, citing multiple securities law infringements. Following this, on June 17, Binance agreed to repatriate assets held for the benefit of Binance.US customers as part of an emergency relief secured by the SEC.

Binance’s regulatory hurdles also extend to Europe. On June 23, the Belgian Financial Services and Markets Authority (FSMA) directed Binance to cease offering its crypto exchange and custody wallet services in Belgium. Shortly after, on June 29, German financial regulator Bafin reportedly rejected a proposal from Binance, escalating the company’s regulatory challenges.

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Tagged : Asic / Binance / Binance Australia / News / SEC

Binance Australia Derivatives License Canceled by ASIC

by Blockchain NewsApril 6, 2023

The Australian Securities and Investments Commission (ASIC) has canceled the license of Binance Australia Derivatives following a targeted review of Binance’s operations in the country. Oztures Trading Pty Ltd, trading as Binance Australia Derivatives, held the Australian financial services license that has now been canceled.

The cancellation of the license means that clients of Binance Australia Derivatives will not be able to open new positions or increase derivatives positions on the platform from April 14. Furthermore, Binance is expected to close any remaining open positions on April 21, so clients are required to close any existing derivatives positions before that date.

ASIC’s statement on the cancellation of the license also clarified that the cancellation does not affect Binance’s obligation to continue as a member of the Australian Financial Complaints Authority until April 8, 2024.

Binance is a major cryptocurrency exchange platform that provides a wide range of services, including cryptocurrency trading, derivatives trading, and lending. The exchange has faced regulatory scrutiny from several countries, including the United States and the United Kingdom, for operating without proper licenses and complying with regulations.

The cancellation of Binance Australia Derivatives’ license by ASIC comes amid increased regulatory scrutiny of cryptocurrency exchanges and their compliance with financial regulations. In recent months, several countries have tightened their regulations on cryptocurrency exchanges, including China, India, and Turkey, among others.

Moreover, Binance is not the only cryptocurrency exchange platform to face regulatory action in Australia. In 2020, the Australian Transaction Reports and Analysis Centre (AUSTRAC) initiated legal proceedings against the country’s largest cryptocurrency exchange, BTC Markets, for alleged breaches of anti-money laundering laws.

In conclusion, the cancellation of Binance Australia Derivatives’ license by ASIC is a significant development in the regulatory landscape of cryptocurrency exchanges in Australia. It highlights the importance of compliance with financial regulations and the need for cryptocurrency exchanges to operate within the legal framework of the countries they operate in. As the cryptocurrency market continues to grow, it is likely that more regulatory actions will be taken against cryptocurrency exchanges that do not comply with financial regulations.

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Tagged : Asic / Australia / Binance / Derivatives / LICENSE CANCELLATION / News

Scammers Target Australians in Cryptocurrency Call Center Scheme

by Blockchain NewsFebruary 27, 2023

It has come to light that people of Australia are the principal targets of a sophisticated multinational network of con artists that operate out of call centers focused on bitcoin. The network is believed to have originated in China. The heart of operations for the network may be found on the continent of Australia. It is commonly believed that the administration of this network is being handled by criminal syndicates that have their headquarters in Israel.

As part of a large-scale operation, law enforcement officers from the countries of Serbia, Germany, Bulgaria, and Cyprus carried out house searches in a total of eleven locations across the country of Serbia, including four call centers. These locations included the country’s capital city of Belgrade. Officials from the island nation of Cyprus were responsible for the operation’s coordination. During the course of this operation, they discovered evidence showing that Australians were among the citizens of all of the other countries who were exposed to the highest degree of examination. This information suggests that Australians were among those subjected to this level of inspection. The material was made available to the general public on February 23 via the dissemination of an article that had been authored by The Australian and published on that day.

Fifteen individuals and about 1.46 million dollars’ worth of cryptocurrencies were seized into custody as a direct result of the operations, which were carried out as a direct consequence of the acts.

It would seem that con artists who work out of these contact centers are using advertisements on social media in an effort to persuade fresh victims into falling for their schemes. They achieve this goal by ensuring prospective investors that any investments they make would result in a significant return on the cash that they have invested. The findings of the research reveal that individuals do engage in this activity, which testifies to the notion that it is prevalent since it indicates that people do participate.

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Tagged : Accc / Asic / Australia / Bulgaria / Business / Canada / CRYPTOCURRENCY INVESTMENT / Cyprus / Germany / Investments / Israel / News / Regulation / SERBIA

Core Scientific to Pay Outstanding Debt with Mining Machines

by Blockchain NewsFebruary 4, 2023

The New York Digital Investment Group (NYDIG) and the cryptocurrency mining company Core Scientific came to an agreement wherein Core Scientific would pay off an outstanding debt of $38.6 million by giving over more than 27,000 mining devices that were used as collateral.

The corporation said in a document submitted to the court that the mining rigs were no longer necessary to its operations and future plans. The company is now awaiting clearance from the United States Bankruptcy Court for the Southern District of Texas, which is in control of the procedures at this point.

Core Scientific emphasised that the long-term advantages of paying off its debt “outweigh the immediate loss,” despite the fact that the business acknowledged that the action would have a detrimental effect on the company’s sales. The company that mines cryptocurrencies views the move as the first step toward becoming more lucrative and sustainable in the long run.

Additionally, the company is transitioning its operations to a fleet of mining rigs that it describes as “slightly smaller, but more efficient.” These mining rigs had been stored away and were not actively mining Bitcoin (BTC). The business intends to reduce some of the losses sustained as a result of the transfer of assets by putting into operation the S19 XP mining rigs that are not being used at the present time.

On December 21st, the cryptocurrency mining firm filed its Chapter 11 bankruptcy petition. A number of months had passed since the firm disclosed in a statement with the Securities and Exchange Commission that it was going through a difficult financial period before this file was made. The firm said at the time that its financial difficulties were due to higher power costs, an increase in the worldwide Bitcoin hash rate, low Bitcoin values, and the bankruptcy of Celsius.

The mining company’s attempt to replace its current credit with a new loan worth $70 million was given the go-ahead by the bankruptcy court on January 31. Because of this, the investment bank B. Riley, which is also one of Core Scientific’s debtors, will now be able to provide the company with a loan.

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Tagged : Asic / Bankruptcy / Bitcoin Mining / Business / Mining / News / Regulation

Core Scientific to Pay Outstanding Debt with Mining Machines

by Blockchain NewsFebruary 4, 2023

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Tagged : Asic / Bankruptcy / Bitcoin Mining / Business / Mining / News / Regulation

Australia’s Government is Bolstering Its Market Regulator’s Digital Asset

by Blockchain NewsFebruary 3, 2023

As part of its “multi-stage strategy” to cracking down on cryptocurrencies and ensuring that crypto companies provide accurate risk disclosures, the Australian government is increasing the size of the digital asset team that works under its market regulator.

The new restrictions are intended to safeguard consumers who are dealing with bitcoin, as described in a joint statement released on February 2 by the Assistant Treasurer of Australia, Stephen Jones, and the Australian Treasurer, Jim Chalmers.

The treasurers said that the multi-stage strategy would entail three components, these components being the strengthening of enforcement, the strengthening of consumer protection, and the establishment of a framework for its token mapping reform.

The Australian Securities and Investments Commission (ASIC) has announced that they would be “upping enforcement efforts” as well as increasing the number of their digital assets division. This is one of the most significant adjustments.

According to Chalmers and Jones, the ASIC would have a primary emphasis on ensuring that customers are adequately informed of the potential hazards posed to them by crypto product and service providers.

In the meanwhile, the Australian Competition and Consumer Commission (ACCC), the country’s competition watchdog, will soon be receiving new tools from the government to assist it in protecting consumers against frauds using cryptocurrencies. The total amount of money lost to scams using cryptocurrency payments was recorded to be $221 million in 2022.

The ACCC will use the new technology, which will be in the form of a real-time data-sharing platform, to detect and prevent frauds using cryptocurrencies.

When a framework is finalised to regulate the licencing and custody of digital assets, consumer protection will also be strengthened. This will “ensure consumers are protected from avoidable business failures or from the misuse of their assets by service providers,” according to the official description of the goal of the framework.

However, the implementation of this framework won’t begin until the middle of 2023, and it’s likely going to take a significant amount of time until it’s codified into law.

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Tagged : Accc / Adoption / Asic / Australia / Blockchain / Business / FTX / Government / News / Regulation / Scams

Unregistered Crypto Asset Manager BPS Sued by Aussie Regulator

by Blockchain NewsOctober 25, 2022

The Australian Securities and Investment Commission (ASIC) has brought civil penalty proceedings in the Federal Court against BPS Financial Pty Ltd, one of the asset management firms operating in the country.

According to a press release shared by the regulator, BPS Financial made a number of false and misleading statements about Qoin Financial tokens which it allegedly distribute to 79,000 investors.

As noted by ASIC, BPS Financial marketed the Qoin token by promising that those who hold the coin can exchange them for other financial assets including the Australian Dollar on independent exchanges. While BPS also alleges that the Qoin token can be used to purchase goods and pay for services from merchants it is in partnership with, it claimed that the wallet and crypto product of the Qoin token were regulated by relevant authorities.

The Aussie regulator came to find out that none of the claims of the company are true and that is contrary to the claims, the products were not licensed, and neither were token holders able to liquidate their holdings as promised on independent brokerage firms.

“We allege that, despite what BPS represented in its marketing, Qoin merchant numbers have been declining, and that there have been periods of time where it was not possible to exchange Qoin tokens through independent exchanges,” said ASIC Deputy Chair Sarah Court, “ASIC is particularly concerned about the alleged misrepresentation that the Qoin Facility is regulated in Australia, as we believe the more than 79,000 individuals and entities who have been issued with the Qoin Facility may have believed that it was compliant with financial services laws when ASIC considers it was not.”

Effectively, ASIC is seeking declarations, pecuniary penalties, injunctions, and adverse publicity orders from the Court. The regulator has been playing a more active role in the industry and recently halted 3 crypto funds belonging to Holon Investments in a bid to protect consumers.

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Tagged : Asic / BPS / QOIN TOKEN / Regulation

Aussie Regulator Halts 3 Crypto Funds Belonging to Holon Investments

by Blockchain NewsOctober 17, 2022

The Australian Securities and Investment Commission (ASIC) has issued a stop order on three crypto funds belonging to Sydney-based Holon Investments Australia Limited.

According to a Press Release shared by the regulator on Monday, the three Holon crypto funds include those linked to Bitcoin (BTC), Ethereum (ETH), and Filecoin (FIL) respectively.

According to the regulator, the reason for the halt in the offering of these crypto funds is that the firm did not meet the non-compliant target market determinations. ASIC fears that Holon is offering the product to retail investors whose investment goals and capabilities may not necessarily fit into the risks associated with the three products.

The regulator reiterated that the embargo is temporary and will remain so for the next 21 days. The selection of Bitcoin, Ethereum, and Filing is essentially based on their extreme volatility and by a subtle extension, their popularity among retail investors.

“The interim orders stop Holon from issuing interests in, giving a product disclosure statement for or providing general advice to retail clients recommending investments in the Funds. The order is valid for 21 days unless revoked earlier,” the announcement reads, adding that “ASIC made the interim orders to protect retail investors from potentially investing in funds that may not be suitable for their financial objectives, situation or needs.”

The regulator noted that Holon Investments has the right to meet its requirements to offer the products, otherwise, it will place a final stop order on the products.

The Australian ecosystem is one that is very vibrant, however, with a lot of fraudulent practices hitting users in the country, regulators are very cautious in their attempts to protect the average consumer. The same sentiment is shared by regulators in other top economies like the United States and the United Kingdom.

In all, this offering of protection accounts for why many nations are still relatively slow with their embrace of regulation when compared to major crypto hubs like the UAE and Singapore.

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Tagged : Asic / Bitcoin / Ethereum / Filecoin / HOLON INVESTMENTS / Regulation