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Binance Australia has announced that it has closed the derivatives trading accounts of some wholesale investors in Australia.
The move came after an internal investigation conducted by the exchange, where it was discovered that the users in question did not meet the requirements for wholesale investors.
Derivative Trading Accounts Closed
Binance Australia has revealed that it has shut down the derivative trading accounts of some users that had been incorrectly classed as wholesale investors. The move comes after an internal investigation discovered that they did not meet the criteria for such investors. Binance Australia only offers crypto derivatives trading to wholesale investors while not allowing retail investors to trade in futures and financial derivatives products on its platform. This has been done to remain in compliance with local laws and regulations. Binance tweeted about the developments from its Twitter handle, stating,
“Our team identified a small number of Australian users who were incorrectly classed as ‘Wholesale Investors’ on Binance. As per Australian regulation, we were required to inform these users and close any of their own derivative positions with immediate effect.”
A spokesperson for Binance Australia stated that the exchange discovered discrepancies during an internal review of its onboarding process. Following the review process, the incorrectly labeled accounts have had their positions closed, with the owner of these accounts no longer being able to access the derivatives market on Binance.
Compensation Plan In The Works
Binance stressed that the action on the incorrectly tagged accounts was necessary in order to stay in compliance with local regulations that allow only wholesale investors to trade such products. Additionally, the exchange stated that it had reached out to the impacted users and would fully compensate them for their losses. The exchange tweeted,
“We have already contacted all impacted users and will fully compensate them for their losses incurred while trading derivatives on Binance. Five hundred users were affected by this remediation, which was a necessary action to ensure we stay compliant with local laws. We serve over 120 million users globally, and every user is important to us. We are in contact with the affected users to firm up our compensation plans for them.”
In total, around 500 Australian users were impacted by the action.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.