EXCLUSIVE: Binance actively working to bring futures back to France

Wednesday, September 20, 2023

The exchange, which withdrew its derivatives from the French market in August 2022, has since set up a dedicated company and filed an application with the Autorité des marchés financiers (AMF), which has yet to give the go-ahead. However, investigations in the United States could slow things down.

Christmas could come a little earlier than expected for some French Binance customers. According to our information, the crypto exchange platform could soon relaunch its "futures" products, which it withdrew from the French market in spring 2022.

At the time, this withdrawal was one of the conditions set by the Autorité des marchés financiers (AMF) for the French subsidiary of the crypto giant to obtain the status of digital asset service provider (DASP).

Futures contracts are complex financial products that allow traders to protect themselves against market fluctuations. But they are also used, increasingly in crypto, by some investors to speculate on the upside or downside, sometimes with uncontrollable financial consequences, particularly for novice investors. These products can be used with leverage of up to 125 times the stake...

It was to protect investors from these products that the Autorité des marchés financiers (AMF) asked Binance in 2022 to withdraw them from the market. At the same time, the platform stopped offering its futures everywhere else in Europe.

This decision was not without consequences, however, as most of Binance's customers who used futures, particularly in France, moved to FTX. A few months later, the platform went bankrupt in one of the biggest scandals in history. "It was all very well to put some order into futures, but the collateral damage of this ban in Europe was enormous", explains Stéphanie Cabossioras, managing director of Binance France.

Losses to FTX clients amounted to several billion dollars, even though the liquidators of Sam Bankman-Fried's company recovered some of the stolen funds.

Even before FTX's collapse, Binance France had organised itself to relaunch futures, but in a more structured way. The company created a dedicated branch in May 2022: Binance Futures.

According to our information, the French subsidiary also submitted an application a year ago, in September 2022, with a view to obtaining investment services authorisation (ISP). This authorisation is essential for Binance France as futures contracts are considered to be traditional investment products.

"We know that access to Binance futures products is a strong expectation of our users. We are working hard to this end so that we can offer them under satisfactory regulatory and user protection conditions", confirmed a Binance spokesperson.

The ISP licence is issued by the AMF, which is currently examining the application. When approached by The Big Whale, the AMF did not respond. According to our information, one of the main sticking points stems from Binance's situation in the United States, which is being sued in several cases. A potential legal front across the Atlantic for the crypto giant could seriously damage the reputation of France's stock market watchdog.

This analysis is not investment advice. It has been prepared without taking into account your personal situation, particularly your financial situation, risk profile, and investment objectives.

Before investing in any product, investors should fully understand the risks involved and consult their own legal, tax, financial, and accounting advisors.

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