Binance Bans Hong Kong Users from Trading Derivates

Written by: Sophia Cruz • Monday, August 9, 2021 • 2 min read

Binance Banned Hong Kong Users from Trading Derivates

Binance has been on the news since its first regulatory issue. One of the major things they are doing is to stop future and derivative trading. On Friday, the crypto exchange company notified all users in Hong Kong that they are going to stop crypto derivatives trading. Users will not be able to open a new derivatives products account, and current users will be given 90 days to close their existing positions. This implies that any user should cash in their investment before the deadline, in order to avoid major losses.

The crypto exchange giant has been trying to adopt a very regulated approach, in order to comply with each country’s law. The recent halt on derivative trading in Hong Kong shows their willingness to cooperate with the financial regulators, as it is already doing in countries like the Netherlands, Italy and Germany. Even after implementing the bans in several countries, Binance is still one of the largest derivatives platforms. As reported, there is a daily trading volume of nearly $70-$100 billion on the Binance platform.

The after-effects

The derivative industry is huge and it has a significant influence on the market. It has faced a lot of moderation and regulation questions, due to its hugely manipulative nature. Binance’s ban on derivatives might actually be a good point for the company, which plans to reduce leverages on trading, also for reasons of compliance. As stated by Binance, this is “in line with our commitment to compliance”. If this continues, the derivatives industry might decrease as the regulations in each country increase.

These regulatory actions have had an effect on the price of Binance Coin as well, with the altcoin noting significant corrections over the past few months. However, BNB opened at $342 on Sunday. Nonetheless, it’s worth pointing out that Binance has displayed some flexibility recently, in its efforts to adapt and comply with the legal requirements of the financial regulators in the various countries.

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ABOUT THE AUTHOR See More

Sophia Cruz

Financial Writer - Asian & European Desks

Sophia is an experienced writer, reporter and newsdesk member, mostly on the financial sectors. For the past 5 years Sophia has covered a wide variety of topics such as the financial markets, economics, technology, fin-tech and trading. Sophia has been a part of the FX Leaders team since 2017 and works on producing valuable content and information for traders of all levels of experience.