Stepping up efforts to minimize the inherent risks of trading cryptocurrency, major crypto exchange Binance has announced it would restrict access to derivatives products to Hong Kong users. The official announcement reads:
“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.”
However, Binance’s proactive means to restrict Hong Kong users was not supported by a date of when the restrictions will be imposed. To provide clarity behind Binance’s latest restrictions, CEO Changpeng Zhao said the move is aimed to be a “proactive measure” for establishing “crypto compliance best practices worldwide.”
Zhao also summarized Hong Kong-related developments, stating:
“New Binance users from Hong Kong can no longer open futures accounts and we will wind-down access for existing users.”
While Binance’s proactive ban on Hong Kong users may tend to protect new users, the development seems to be more in line with China’s increased crackdown on crypto business with no exception on exchanges, mining or token offerings.
Related: Binance to shut down crypto derivatives trading in Europe
Binance continues to face regulatory challenges across multiple countries for allegedly offering a platform for illegal trades. In an effort to keep doors open for business, Binance is reportedly on a quest to stop offering high-risk services. As of the latest, the crypto 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 crypto regulations. However, the Securities Commission Malaysia asked Binance to shut operations within its region completely. Binance was reportedly operating within the Malaysian jurisdiction despite no authorization from the government.
Adding to the mix, Germany’s financial watchdog, the Federal Financial Supervisory Authority, aka BaFin, has also warned Binance of facing heavy fines on the grounds of selling shares in Germany in the form of “share tokens” without offering the necessary prospectuses.