Binance Australia Derivatives has sent unexpected message to a subset of its users, informing them that their accounts would be closed immediately because they had been incorrectly labeled as “wholesale clients.”
Because of the outpouring of public opinion following this occurrence, the Australian Securities and Investments Commission (ASIC) announced the following day that it will be undertaking a “targeted review” of Binance’s local derivatives business.
Binance Australia Derivatives incident impacts 500 users
According to a statement released by representative on Feb. 24, the “classification of retail clients and wholesale clients” at Binance Australia Derivatives would be a focus of the investigation.
“It has not yet reported these matters to ASIC in accordance with its obligations under its Australian financial services license,” the spokesperson said.
According to Binance, 500 users had their accounts affected by the incident.
Users started sharing screenshots of the alerts on Twitter, but a representative for the regulator stated, “We are aware of Binance’s social media posts.”
Strict adherance
Known for its stringent compliance measures, Binance turned to social media to explain why certain individuals had their derivatives contracts and accounts canceled after being misidentified as “wholesale clients.” Only institutional investors, or “wholesalers,” can use the site at this time.
Binance, the largest cryptocurrency exchange in the world, has made no secret of its efforts to meet local legal standards.