Crypto exchange Binance’s Australia Derivative Services are under speculation over abruptly closing derivatives positions of Australian users who were incorrectly classified as “Wholesale Investors”. It began when Binance immediately closed users’ accounts due to a false classification of some users.
Soon the news became the topic of discussion among the crypto community, causing a flurry of responses on social media. The next day, the Australian Securities and Investments Commission (ASIC) announced it would be carrying out a “targeted review” of Binance’s local derivatives operations.
The review of Binance Australia Derivatives will include the company’s “classification of retail and wholesale clients, said a spokesperson of the regulator. ”It has not yet reported these matters to ASIC in accordance with its obligations under its Australian financial services license,” the spokesperson added.
The spokesperson clarified that the regulator is aware of Binance’s social media posts, which were made shortly after users took to Twitter and started posting screenshots of the notices. Binance later elaborated that it closed derivatives positions and accounts for some users who incorrectly as “wholesale clients” as the platform is only available for wholesale investors at present.
A total of 500 users were affected by this step, which was necessary to ensure the platform stayed compliant with local laws, tweeted Binance. It further mentioned, the company is in contact with the affected users to firm up compensation plans for them.
A spokesperson from Binance said that the exchange is dedicated to adhering to local Australian laws.
The co-founder and CEO of Binance, Changpeng CZ Zhao responded that users will be compensated for any losses incurred due to the forced closing of positions. Binance is looking for ways to reopen futures in Australia if possible.
Most recently, CZ refuted rumors of delisting US-based tokens and stated that “blockchain has no borders” when someone asked him about US-based projects. It would be interesting to see what more steps it would take to comply with Aussie authorities.
Also Read: Australia’s Retirement System Emerges as New Crypto Frontier
