Binance Australia Derivatives abruptly sent out a message to a specific group of users on February 23 that it would immediately close the accounts of certain users due to misclassifying them as “wholesale customers.”
The incident aroused heated discussions among users on social media, and the next day, the Australian Securities and Investments Commission (ASIC) announced that it would conduct a "targeted review" of Binance's local derivatives business.
The review of Binance Australia Derivatives will include the company’s “category of retail and wholesale clients,” according to a Feb. 24 statement from a spokesperson for the regulator. However, the spokesperson said that the regulator was “aware of Binance’s social media posts,” which came shortly after users began posting screenshots of notifications on Twitter.
Binance clarified the incident on social media, saying it closed the derivatives positions and accounts of some users who were misclassified as “wholesale clients.” Currently the platform is only available to wholesale investors. A Binance spokesperson reiterated that the exchange is “committed” to complying with local Australian laws.
Binance’s co-founder and CEO Changpeng Zhao “CZ” tweeted that all users will be compensated for any losses and ignore the FUD. He also mentioned that the company was looking into the situation to see if it could choose to reopen futures in Australia in the future. Binance cryptocurrency exchange is the largest cryptocurrency exchange in the world and has been very public about its efforts to comply with the regulatory requirements of its local operations.
