Australian Regulators to Review Binance Derivatives
- Binance said it had reached out to the 500 affected users and plans to compensate them.
- A Binance representative said the exchange is committed to abiding by local Australian laws.
Australia’s financial watchdog will conduct a “targeted review” of Binance’s derivatives operations in the country after the exchange admitted it had wrongly classified some users. Binance announced on Thursday that it had liquidated the positions of 500 of its users in Australia after discovering that the account labels were incorrect.
Binance wrongly tagged the accounts as “wholesale investors,” which led to their derivative positions being closed. However, Australian policies do not allow retail traders to trade financial derivatives and futures. Binance said it would compensate the affected users and has already contacted them.
Reacting to the situation, a spokesperson for the Australian Securities and Investments Commission (ASIC) said,
ASIC is aware of Binance’s social media posts overnight stating that it had incorrectly classed a group of Australian consumers as wholesale investors. It has not yet reported these matters to ASIC in accordance with its obligations under its Australian Financial Services License.
A representative for Binance emphasized that the exchange is “committed” to abiding by local policies in Australia. The co-founder and CEO of Binance, Changpeng “CZ” Zhao, also stated that Binance is investigating the situation to evaluate if reopening futures in Australia will be an option at some point.
Binance is currently the leading crypto exchange globally but has frequently clashed with regulators in different countries. However, the exchange said it is focused on improving ties with regulators and complying with local laws.
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