By stepping up efforts to minimize the inherent risks of cryptocurrency trading, Major crypto exchange Binance has announced that it would restrict access to derivative products to Hong Kong users. The official announcement reads:
“Hong Kong users will have a 90-day grace period to close their open positions. During the grace period, no new positions can be opened. “
Nevertheless, Binance’s proactive means of restricting Hong Kong users was not backed by a date for when the restrictions will be imposed. To provide clarity behind Binance’s latest restrictions, CEO Changpeng Zhao said that the measure is intended to be a “proactive measure” to establish “best compliance practices for cryptocurrencies around the world.”
Zhao also summarized the developments related to Hong Kong, stating:
“New Binance Hong Kong users can no longer open futures accounts and we will reduce access for existing users.”
While Binance’s proactive ban on Hong Kong users may tend to protect new users, The development appears to be more in line with China’s growing crackdown on the crypto business, with no exceptions in exchanges, mining, or token offerings.
Binance continues to face regulatory challenges in several countries for allegedly offering a platform for illegal transactions. In an effort to keep the doors open for business, it is reported that Binance is on a quest to stop offering high-risk services. At the last minute, the cryptocurrency exchange announced the suspension of derivatives trading in Europe, starting with Germany, Italy and the Netherlands.
As Cointelegraph reported, the move signaled Binance’s proactive steps toward harmonizing cryptocurrency regulations. However, the Malaysian Securities Commission asked Binance to shut down operations within its region entirely. Binance would have been operating within the jurisdiction of Malaysia even though it did not have authorization from the government.
Furthermore, Germany’s financial watchdog, the Federal Financial Supervisory Authority, also known as BaFin, has also warned Binance of facing heavy penalties for selling shares in Germany in the form of “share tokens” without offering the necessary prospects.