Binance closes derivative positions of some Australian traders

Australia state Binance Provident Twitter Action AUD Australian

23.02.2023 - 17:27

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ambcrypto.com:

Binance – the largest crypto exchange in the world by trading volume – announced that it closed derivate positions of some users, earlier today. The users affected by this move are solely based in Australia, and the Australian regulation influenced the action. In a notice put on Twitter, the crypto exchange stated that some users were incorrectly classified as “wholesale investors”.

However, as per regulation, Binance was required to terminate services to these accounts immediately and notify those affected. The exchange further said, “We have already contacted all impacted users and will fully compensate them for their losses incurred while trading derivatives on Binance.”

Moreover, in a notification sent to the users, Binance stated that the affected users have to provide fresh information or evidence to regain access and services to their accounts. This is to prove that the user meets the requirements needed to be classified as a wholesale investor.

A user on Twitter said,

<p lang=«en» dir=«ltr» xml:lang=«en»>1) I onboarded as a wholesale client with the Wholesale client certificate which is literally the requirement 2) No advance warning, no grace period, no time to upload docs. Positions nuked. jfc

— illiquidity providoooor (@skyquake_1) February 23, 2023

The crypto exchange launched Binance Australia Derivatives in July 2022. From the start, the platform had allowed trading services only to eligible Australian wholesale users. This policy is in compliance with Australia’s Corporations Act 2001, section 761GA.

Moreover, to be classified as a wholesale client, users have to satisfy one or more of the exchange’s tests. This includes a wealth test, professional investor test, large business test, sophisticated investor test,