Cryptocurrency exchange operator Binance will close its Australian derivatives business after relinquishing a financial services license on Thursday amid a regulatory probe into its operations.

The Australian Securities and Investment Commission (ASIC) has been conducting a "targeted review" of Binance, first confirmed in February when Binance said it had misclassified some retail investors as wholesale.

Retail investors are entitled to a higher level of regulatory protection.

On Thursday, ASIC canceled the Australian financial services license of Oztures Trading Pty Ltd, trading as Binance Australia Derivatives (Binance), in response to a request from the company.

All positions will close by April 21.

"It is critically important that AFS licensees classify retail and wholesale clients in accordance with the law," ASIC Chair Joe Longo said in a statement.

"Our targeted review of these matters is ongoing, including a focus on the extent of consumer harms."

The financial services license authorized Binance to issue derivatives and foreign exchange contracts.

Noting many cryptocurrency products and services are not regulated by ASIC, Longo said the regulator supported a "regulatory framework" for the asset class.

Binance said it had decided to pursue a "more focused approach" in Australia after a "recent engagement with ASIC."

It added that the closure would not impact Australians using its spot exchange product.

The world’s largest cryptocurrency exchange is battling regulatory suits and probes worldwide. Last month, the U.S. Commodities Futures Trading Commission (CFTC) sued Binance and its founder Changpeng Zhao for operating what the regulator alleged was an "illegal" exchange.

ASIC noted the CFTC suit and regulatory actions in the U.K., Japan, Italy and Singapore.