Fresh off the heels of Binance’s last announcement to discontinue crypto derivatives offerings in Germany, Italy, and the Netherlands, the company revealed on Friday crypto derivatives products in Hong Kong will cease as well. Effective immediately, users won’t be able to open new derivatives positions and customers with existing derivatives positions have 90 days to close them.
Binance Ends Crypto Derivatives Offerings in Hong Kong
Binance revealed on August 6 that the exchange will no longer offer crypto derivatives products to customers. The news follows the company’s current issues with global regulators and large financial institutions ceasing to service Binance. On August 3, Bitcoin.com News reported how HSBC became the latest financial institution to suspend operations with the company. Three days later, Binance revealed it is “restricting derivatives products offerings in Hong Kong.”
According to the announcement, the change is aligned with the exchange’s compliance initiatives. “With immediate effect, users from Hong Kong will not be able to open new derivatives products accounts,” Binance said on Friday. “Also, with effect from a date to be announced in a later notice, users from Hong Kong will have a 90 days’ grace period to close their open positions. During the grace period, no new positions may be opened.”
On August 3, when Binance revealed it would no longer provide these services to residents in Italy, the Netherlands, and Germany, Binance’s official statement explained it was for the same reasons. “As the crypto ecosystem evolves globally, we are continually evaluating our products and working with our partners to meet our users’ needs,” Binance said at the time.
Binance Claims to Be First Exchange to Proactively Restrict Access to Crypto Derivatives
In fact, despite all the negative press, Binance believes the exchange is a pioneer when it comes to being proactive with regulatory compliance. “Binance will be the first major cryptocurrency and digital assets exchange to proactively restrict access to derivatives products to Hong Kong users,” the company’s announcement emphasizes. “Our aim is to create a sustainable ecosystem around blockchain technology and digital assets, and we hope that such efforts will help the industry grow in the local market in the long-run,” the crypto exchange’s notice to customers adds.
Meanwhile, a recent report published on July 30, noted that bans on crypto derivatives offerings from exchanges like FTX and Binance in heavily regulated regions like the United States are full of loopholes. Despite Binance proactively restricting access to crypto derivatives products, the trading platform is still the largest derivatives exchange in terms of open interest and trade volume. Statistics show Binance has seen a massive $75 billion in volume during the last 24 hours and $7.9 billion in open interest.
What do you think about Binance shutting down crypto derivatives products for Hong Kong residents? Let us know what you think about this subject in the comments section below.
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Author: Jamie Redman