Binance Restricts Hong Kong Users From Trading Derivatives
The world’s leading crypto exchange, Binance, has announced that it will no offer crypto derivative services to its Hong Kong users. This Binance announcement follows their previous announcement of discontinuing their derivatives services for their European customers.
Users With Open Positions Will Be Given A Grace Period
The succession of announcements is mainly due to the increased regulatory scrutiny by more than 12 countries on the exchange. Binance further revealed that it would soon announce a grace period for Hong Kong users with open positions on its platform to close such positions.
Binance Announcement. Source: Twitter
You’d recall that mid last month, Hong Kong’s security and futures commissions (SFC) sent a regulatory warning to the exchange indicting them for not having an operating license. Authorities in various countries who have sent regulatory warnings to Binance are worried about the high leverage that Binance and other exchanges often offer to crypto traders on their platforms.
Binance has the reputation of offering the highest leverages with up to 120X on some crypto trade pairs. Hence, most regulators frown at crypto exchanges that offer derivative services.
Binance Making Regulatory-Compliant Moves
Since the flurry of regulatory sanctions started flying in its face, Binance has started making moves to ensure its operations comply with what the regulators want. One of such ways is that new traders on its platform no longer access 120X leverages on their trades like before, 20X is the maximum leverage they can now access.
The firm has also hinted that it would do the same for all its users (old and new) on its platform. Late last month, changing Zhao, Binance CEO, announced that the exchange would seek to establish a physical office in any country where it’s fully operational.
Binance CEO Tweet. Source: Twitter
Some regulators have revealed that Binance’s lack of a physical office makes it almost impossible for it to contact them when the need arises, such as cases of fraud or complaints. The Binance team hopes that this move and having a CEO with more experience in regulations will endear to the hearts of regulators, especially in countries where they’ve shut down their operations.
Binance Introduces Contactless And Borderless Payment Solution
Despite facing regulatory pressure from several authorities all over the world, Binance continues to expand its scope of services. Its latest offering is a collaboration with hybrid payments giant, Alchemy Pay, to create a payment gateway that allows users from both platforms to switch from cryptocurrency to fiat easily and vice-versa.
While this service is still only available via the Binance app, users won’t be paying any transaction fees on any crypto transactions they perform. Alchemy Pay’s 2 million members in 20 countries can use any of Binance’s 40 cryptocurrency options to make and receive payments.
Alchemy pay is also in partnership with top global brands such as Shopify, Aldo, and QFPay. The firm claims to be one of the pioneers of a fiat-cryptocurrency payment solution for individuals and businesses.
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