Binance has closed the accounts of some of its Australian users.
The derivatives positions held by those users have also been closed by the exchange.
The exchange had incorrectly allowed retail traders to trade futures which are only available to wholesale investors.
Binance will compensate users for the losses incurred by the abrupt closure of their accounts and positions.
Several users of Binance Australia Derivatives reported a notification from the exchange earlier today, which informed them about the closure of their futures account and the winding down of any open derivatives positions. This was followed by a statement from the world’s largest crypto exchange, which revealed that the concerned accounts and their derivative positions were shut down in accordance with Australian regulations.
Binance will compensate affected users for their losses
According to the notification, the Australian derivatives division of the crypto exchange launched an investigation in January 2023 and found that several retail traders were incorrectly classified as wholesale investors. Users who did not meet the criteria to classify as wholesale investors were wrongly allowed to trade futures and financial derivatives products on the platform, which goes against local regulations.
As a result, users who did not meet the required criteria were barred from trading these “complex, high-risk products”. In addition to liquidating any open positions, the platform will restrict their access to the Binance Australia Derivatives trading platform. Access to the exchange’s spot trading platform remains unaffected.
“We have already contacted all impacted users and will fully compensate them for their losses incurred while trading derivatives on Binance.”