Tag: Derivatives

Binance Australia Derivatives License Canceled by ASIC

by Blockchain News

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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Binance Australia Derivatives Closes Accounts After False Classification

by Blockchain News

On February 23, the company Binance Australia Derivatives sent an unexpected notice to a subset of its customers, informing them that the company would be immediately canceling their accounts because of an error in which certain users were incorrectly categorized as “wholesale clients.” The error occurred as a result of the company incorrectly classifying certain users as “wholesale clients.” This issue transpired as a result of some users being wrongly classified as “wholesale customers.” The problem occurred because the company was mistakingly referring to certain users as “wholesale clients,” which was caused by a misunderstanding.

This incident caused a flurry of responses from users on social media, and the next day, the Australian Securities and Investments Commission (ASIC) announced that it would be conducting a “targeted review” of Binance’s local derivatives operations in response to the public outcry that it had generated. This review was in direct response to the public outcry that this incident had generated. This evaluation was an immediate reaction to the backlash that had been caused by this episode in the public’s eye. This assessment was an instant response to the backlash that had been produced by this incident in the eyes of the public.

The “categorization of retail customers and wholesale clients” of Binance Australia Derivatives will be one of the topics that will be examined as part of the assessment that will take place on the 24th of February, according to a statement that was released by a representative for the regulator. This will be one of the topics that will be examined as part of the evaluation that will take place. On February 24th, as part of the evaluation that will take place on that day, this will be one of the subjects that will be reviewed and discussed in depth. The evaluation will be carried out on February 15, which is the day after Valentine’s Day in the Gregorian calendar.

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Binance Australia Derivatives starts closing certain positions and accounts

by Blockchain News

Users of the Binance Australia Derivatives product have reported receiving unexpected notices on February 23 from the digital asset platform, which said that the company has begun closing some derivatives contracts and accounts.

Individuals who did not match the qualifications to be a “wholesale investor” were informed that all of their positions would be closed, and they would no longer be allowed to use the Binance Australia Derivatives Platform, according to screenshots that were uploaded on Twitter by a variety of users.

Users have been advised that in order to continue utilizing Binance Australia’s derivatives platform, they are need to provide the requisite proof to demonstrate that they satisfy the criteria for the role of “wholesale investor.”

The letter went on to explain that Binance Australia Derivatives is working on a remediation and compensation plan for customers to whom the company owes any refunds as a result of the change.

 

It was then said that the steps that followed were in accordance with the local legislation in Australia, and as a result, the users were informed quickly, and the accounts that were impacted were closed.

The company officially goes by the name Oztures Trade Pty Ltd, however its trading name is Binance Australia Derivatives. The local Australia office of Binance is a corporate approved agent for Oztures. This is the connection between the two companies.

It is made abundantly clear that derivatives items are only made available for wholesale customers located in Australia in the official overview that was issued in July of 2022.

Despite this, customers commented to Binance’s article on Twitter, with one user from Australia stating that they were unable to stake their cryptocurrency owing to complications in their location. Another user said that flexible earn was no longer accessible in Australia, which prompted the Binance support staff to react by saying that they will investigate the situation.

As part of its “multi-stage” strategy to combat frauds, Australia strengthened its watchdogs for the cryptocurrency field earlier in the month of February.

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Crypto Exchange FTX Lists Dollar Spot Index Perpetual Futures

by Blockchain News

Cryptocurrency exchange FTX has listed perpetual futures linked to the US dollar spot index, and it is expanding its business scope to the field of foreign exchange derivatives trading.

FTX’s new perpetual contracts will be based on the so-called FTX Dollar Spot Index, which is designed to track the movements of four major currencies, including the Euro, Yen, Canadian dollar, and British Pound against the U.S. dollar.

The FTX USD Spot Index (FTXDXY) is calculated as follows: 35.7*EURUSD^-0.6*JPYUSD^-0.2*CADUSD^-0.1*GBPUSD^-0.1

On the other hand, the foreign exchange market volatility has increased significantly recently. Driven by the tightening of monetary policy and the rapid interest rate hike in the United States, the US dollar is currently at its highest level since 2022, especially after the Federal Reserve raised interest rates several times.

The US dollar index broke through 111 level, refreshed a new high since 2002 and is currently hovering around the all-time high of 111.76.

Non-US currencies generally fell. As the dominant currency in global trade and finance, the fluctuation of the US dollar will broadly impact the global economy.

Given that Bitcoin (BTC) is still seen as a risk asset against inflation, many traders believe that a weaker dollar is needed for Bitcoin to rise.

Conversely, the pound fluctuated amid the chaotic rollout of Prime Minister Liz Truss’ economic plan.

The British government, on September 23, unveiled its most radical tax cuts since 1972 before making a U-turn by ditching its plan. The administration attempted to reduce taxes on workers’ wages and businesses to boost the economy as it heads into recession, which triggered investors to dumped sterling and government bonds.

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CME Group Rolls Out Ether Options for Upcoming Merge

by Blockchain News

CME Group, a leading derivatives marketplace, has launched the options of Ether futures, given that the much-anticipated merge has been pushing demand.

Tim McCourt, the global head of Equity and FX products at CME Group, pointed out:

“As market participants anticipate the upcoming Ethereum Merge, a potentially game-changing update of one of the largest cryptocurrency networks, interest in Ether derivatives is surging.”

Since the merge is slated for September 15, CME Group intends to offer more flexibility with the Ether options. Leon Marshall, the global head of sales at Genesis, stated:

“The launch of the new Ether options contract ahead of the highly anticipated Ethereum Merge provides our clients with greater flexibility to trade and hedge their Ether price risk.”

The merge is anticipated to be the largest software upgrade in the Ethereum ecosystem because it will change the consensus mechanism from proof-of-work (PoW) to proof-of-stake (PoS).

Therefore, the new options will complement CME Group’s Ether futures, which have recorded a 43% surge in average daily volume year-over-year. 

Rob Strebel, the head of relationship management for DRW, said:

“As ether transitions through the anticipated merge this week, we expect we’ll continue to see strong demand for this Ether options contract.”

Since the Ethereum merge has been awaited with bated breath by the crypto community, the network’s speculative action has skyrocketed, Blockchain.News. The open interest shown in the ETH network highlighted that buying pressure outweighed selling. 

On the other hand, a hard-fork mechanism is expected to be deployed within 24 hours after the merge. 

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Huobi To Restrict Derivatives Trading for New Zealand Users

by Blockchain News

Huobi Global, a major cryptocurrency exchange based in Seychelles, announced on Tuesday, 16th August, that it will stop offering derivatives trading services to users in New Zealand, effective on August 23.

Houbi made an announcement on its website that it will halt services, including coin-margined futures, coin-margined swaps, Tether (USDT)-margined contracts, options, and any exchange-traded products (ETP) to New Zealand-based users.

During that particular day, the exchange said it will update its ‘user agreement’ to include New Zealand as a ‘restricted jurisdiction’ with respect to derivatives trading.

Houbi explained to restrict “New Zealand user accounts for derivatives trading in an orderly manner while ensuring the safety of user assets.”

Based on restricted jurisdiction policy, the exchange does not offer derivatives products to around 12 jurisdictions including the U.K. and mainland China.

Moreover, the exchange does not offer ‘all services” to users from 11 jurisdictions, including the U.S., Canada, Japan, Iran, and Singapore.

Expanding Global Footprint

It is unclear whether Huobi will continue providing other trading services to users in New Zealand.

In June, Huobi expanded its global footprint by winning its first license in New Zealand.

On June 21, Huobi obtained registration on New Zealand’s Financial Services Provider Register (FSPR) to provide its crypto trading services in the nation.

The FSPR registration was Huobi’s first step toward expanding its crypto trading business in New Zealand.

All cryptocurrency exchanges are required to register with New Zealand to offer trading services to local users.

The registration enabled Huobi’s local entity, HBGL New Zealand Limited, to operate a regulated foreign currency exchange, asset management services, and money transfer services in New Zealand.

Apart from that, in June, Huobi Group also obtained a new license to establish operations in Dubai.

The two latest regulatory achievements by Huobi came shortly after the company’s affiliate firm based in Thailand was permanently closed in mid-June after the Thai Securities and Exchanges Commission revoked the company’s operating license.

It means that Huobi has not met the expected requirements for its offer of services in the above-mentioned jurisdictions.

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Bullish Sentiment Restores in Crypto Derivatives Markets, Surged to $3.12 Trillion in July

by Blockchain News

Investors in the cryptocurrency ecosystem have increased their exposure to derivatives markets, with trading volume on central exchanges rising to $3.12 trillion in July, up 13% from the previous month, according to researcher CryptoCompare.

Derivatives trading volume on major exchanges hit the $245 billion mark on July 29, up 9.7% from its daily high of $223 billion throughout June, according to CryptoCompare data.

The move was marked by signs of recovery from a crash in futures/options contracts.

Crypto derivatives are secondary contracts or financial instruments whose value is derived from a primary underlying asset such as Bitcoin (BTC), Ethereum (ETH), or other alternative currencies.

Futures are investment contracts that enable investors to gain exposure to an asset without owning it directly. Futures allow traders or investors to speculate on the future price of the underlying asset.

Options offer traders a unique opportunity to buy or sell crypto tokens at a price. The price of an option contract will vary depending on the time of purchase, the strike price, and the day of expiry. 

CryptoCompare states, “the rise in derivatives trading volume indicates an increase in speculative activity as traders believe there is room for further upside in this rally.”

Previous Fed rate hikes, inflation, and the war between Ukraine and Russia triggered investors to sell cryptocurrencies sharply, causing the cryptocurrency market to plummet.

Lower-than-expected inflation data from the United States boosted market risk appetite, and cryptocurrencies have now recovered.

Bitcoin (BTC) quickly crossed $24,000, and Ether (ETH) also managed to climb back above $1,900 during the intraday.

CryptoCompare pointed out that the market is also concerned about the potential market for the upgrade and merger of Ethereum. This upgrade is expected to increase the network rate of Ethereum, which may help Ethereum to strengthen.

So open interest for ETH derivatives is higher than BTC for the first time.

Derivatives market volume now accounts for 69% of total crypto volume, up from 66% in June.

The prospect of value-adding derivatives has made them popular among retail and institutional investors. While U.S. law remains largely ambiguous, forays into derivatives markets have been a better investment option for most businesses looking to capitalize on asset price swings to make money.

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CME Group to Launch Euro-Denominated Bitcoin, Ether Futures on August 29

by Blockchain News

CME Group, the US leading and most diverse derivatives marketplace, announced on Thursday that it will launch Bitcoin Euro and Ether Euro futures on August 29. The move is part of CME’s efforts to expand its cryptocurrency derivatives offering services.

The financial derivatives exchange termed the launch as important as enabling Bitcoin users to trade Euro-dominated Bitcoin (BTC) and Ether (ETH) futures contracts on the regulated exchange.

Tim McCourt, Global Head of Equity and FX Products, CME Group, talked about the development: “Ongoing uncertainty in cryptocurrency markets, along with the robust growth and deep liquidity of our existing Bitcoin and Ether futures, is creating an increased demand for risk management solutions by institutional investors outside the U.S. Our Bitcoin Euro and Ether Euro futures contracts will provide clients with more precise tools to trade and hedge exposure to the two largest cryptocurrencies by market cap.”

CME will unveil Euro-denominated Bitcoin and Ether futures to help meet the rising demand for regulated and expanding, non-USD crypto derivatives.

According to CME, offerings of Euro-denominated Bitcoin and Ether futures contracts could accelerate increasing demand for crypto products from institutional investors.

The products will provide crypto derivative alternatives because the euro, the official currency of 19 out of 27 EU member countries, is the second-most-desired currency in global currency reserves.

CME designed the Bitcoin Euro and Ether Euro futures contracts to match their U.S. dollar-denominated counterparts.

The derivative exchange stated that it will size Bitcoin Euro and Ether Euro futures at five Bitcoins and 50 Ethers per contract. Such new contracts will be cash-settled, based on the CME CF Bitcoin-Euro Reference Rate and CME CF Ether-Euro Reference Rate, which serve as once-a-day reference rates of the euro-denominated price of Bitcoin and Ether.

Rising Infrastructure for The Crypto Investor

CME’s Bitcoin Euro and Ether Euro futures are the latest investment products to be launched tied to a cryptocurrency.

In March, CME launched Bitcoin and Ether options on the micro futures contracts of the two largest cryptocurrencies by market capitalization: Bitcoin (BTCUSD) and Ether (ETHUSD).

Last year, the exchange witnessed interest in crypto assets from retail investors, especially Millennials and Gen Zs, reaching new heights.

That was the part of the reason that led CME, in March this year, to launch micro futures to offer more affordable options for investors seeking to gain exposure to Bitcoin and Ether derivative products.

And so far, the company has continued to expand its suite of cryptocurrency derivatives offerings further.

In October last year, the ProShares Bitcoin Strategy ETF (BITO), the first ETF linked to Bitcoin, started trading, providing investors with the opportunity to gain exposure to Bitcoin returns in a convenient, liquid and transparent manner.

Shortly afterwards, several similar Bitcoin ETFs unveiled their trading services which track the future price of the coin.

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Crypto Exchange Bit.com Rolls Out Savings Product and USDT Margined Futures

by Blockchain News

Bit.com, a Singapore-based crypto exchange owned by Matrixport, has launched a new savings product and USDT margined futures to diversify the cryptocurrency options. 

With an annualized yield of 30%, the fixed savings product will enable users to earn interest from different coins like Bitcoin (BTC), Tether (USDT), Ethereum (ETH), Chainlink (LINK), Bitcoin Cash (BCH), and USD Coin (USDC), among others. 

The savings product was established to meet Bit.com’s objective of driving financial product innovation by rendering trading strategy execution, price discovery, and liquidity provision services. It is also supported by Matrixport, a digital assets financial services platform headquartered in Singapore. 

In September 2021, Matrixport rolled out a “BTC-U Range Sniper” product meant to offer participants high returns whenever Bitcoin’s price moved within a specified range. 

Given that the global population is gearing up to cryptocurrencies as a financial way of the future and wealth-builders based on a Visa study, rolling out different crypto features has been necessitated. 

Therefore, the new Bit.com’s USDT margined futures will enable users to create long or short positions based on the underlying asset and profit whenever the price falls or rises.

Having already supported USDT margined perpetual swap, Bit.com’s new cryptocurrency derivatives will enable participants to have more options in the crypto space.

Earlier this month, the crypto exchange partnered with TON to expand, enhance and develop its ecosystem. This decision was arrived at after Bit.com witnessed a notable performance from TON’s native token following its listing in January this year. 

TON, which stands for “The Open Network,” is a third-generation proof of stake (PoS) blockchain designed in 2018 by the Durov brothers who founded Telegram Messenger. Furthermore, it is a community-driven blockchain project that prompts rapid transactions and aids various decentralized applications (dapps). 

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Strong Bitcoin and stocks rally position bulls for victory in Friday’s $860M options expiry

by Cointelegraph

Bitcoin (BTC) bulls have good reason to celebrate the 22% gain in the past week. The price is pushing toward $46,000 and to the surprise of many, the $43,000 level held steady despite the volatility caused by the United States inflation data released on Feb.10.

There have been mixed feelings on the macroeconomic side. For example, retail sales in the Eurozone disappointed on Feb. 4 when the figure showed a 2.0% year-on-year growth versus the 5.1% expectation. while the United States nonfarm payroll abruptly showed a 467,000 jobs increase.

Investors are clearly increasingly concerned about corporate earnings despite the stronger than expected China and U.S. economic growth. In the past few weeks some big names took a hit, including Meta (FB), Delivery Hero (DHER-DE), and Paypal (PYPL).

Today’s 7.5% yearly U.S. consumer price index growth will likely reinforce the Federal Reserve’s expectations of at least two interest rate hikes throughout 2022 and not many investors can seek protection in treasuries because the 5-year Treasury yield currently stands at 1.9%.

Bitcoin is still a risky asset, but its price is discounted

Considering that the S&P 500 is only 5% shy of its all-time high, Bitcoin’s recent strength should not come as a surprise. Curiously, put (sell) option instruments dominate the Feb. 11 options expiry, but bears were caught by surprise after Bitcoin price stabilized above $43,000 this week.

Bitcoin options aggregate open interest for Feb. 11. Source: CoinGlass

A broader view using the call-to-put ratio shows a 14% advantage to Bitcoin bears because the $400 million call (buy) instruments have a smaller open interest versus the $460 million put (sell) options. However, the 0.86 call-to-put indicator is deceptive because most bearish bets will become worthless.

For example, if Bitcoin’s price remains above $44,000 at 8:00 am UTC on Feb. 11, only $55 million worth of those put (sell) options will be available. That effect happens because there is no value in the right to sell Bitcoin at $40,000 if it’s trading above that level.

Bulls are aiming for a $300 million profit

Below are the three most likely scenarios based on the current price action. The number of options contracts available on Feb. 11 for bulls (call) and bear (put) instruments varies depending on the expiry price. The imbalance favoring each side constitutes the theoretical profit:

  • Between $42,000 and $44,000: 4,550 calls vs. 1,750 puts. The net result is $120 million favoring the call (bull) instruments.

  • Between $44,000 and $46,000: 6,380 calls vs. 860 puts. The net result favors bulls by $250 million.

  • Between $46,000 and $48,000: 7,860 calls vs. 50 puts. The net result favors the call (bull) instruments by $350 million.

This crude estimate considers the call options used in bullish bets and the put options exclusively in neutral-to-bearish trades. Even so, this oversimplification disregards more complex investment strategies.

For instance, a trader could have sold a call option, effectively gaining a negative exposure to Bitcoin above a specific price. But unfortunately, there’s no easy way to estimate this effect.

Related: Exchange stablecoin reserve hits $27B as Bitcoin rises toward $50K ‘fair value’

Bears best case scenario remains unkind

Bitcoin bulls need a small pump above $46,000 to score a $350 million profit on Feb. 11. On the other hand, bears’ best case scenario requires a 4% price drop from the current $45,600 to reduce their loss to $120 million.

Bitcoin bears currently have no reason to add short positions, considering the recent weak corporate data numbers. Therefore, bulls should continue to display strength by pushing the price to $46,000 or higher during Friday’s options expiry.

A $350 million profit might be just what’s needed for bulls to regain confidence and re-open long leverage futures, causing further upward pressure.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.