Binance Australia Derivatives incorrectly classified end users as wholesale investors, according to an investigation into its onboarding services.
Binance Australia Derivatives users reported abrupt notifications sent by the digital asset platform on Feb. 23, saying it is starting to close certain derivatives positions and accounts.
According to screenshots posted by various users on Twitter, users who did not meet the requirements to be a “wholesale investor” were told all of their positions would be closed, and they would no longer be able to access the Binance Australia Derivatives platform.
Binance closed derivative positions for many Australian users abruptly #Australia #binance pic.twitter.com/4t1gL08oK6
— Moidul Islam (@Mi_moidulislam1) February 23, 2023
Users were informed that to continue using Binance Australia Derivatives platform, they must submit the necessary evidence to meet the requirements to be classified as a “wholesale investor.”
The notification continued to say that Binance Australia Derivatives is working on a remediation and compensation plan for users to whom it owes any refunds in light of the update.
It then said the actions that followed were in line with local regulations in Australia; therefore, the users were immediately contacted and the affected accounts closed.
Our team identified a small number of Australian users who were incorrectly classed as ‘Wholesale Investors’ on Binance.
As per Australian regulation, we were required to inform these users and close any of their own derivative positions with immediate effect.
— Binance (@binance) February 23, 2023
Binance Australia Derivatives is the official trading name of Oztures Trading Pty Ltd. The relation to Binance is that its local Australia branch is a corporate authorized representative of Oztures.
Related: Aussie regulator flagged concerns about FTX months before collapse: Report
In its official overview published in July of 2022, it clearly states that derivatives products are offered for Australian wholesale clients only.
Nonetheless, users responded to Binance’s post on Twitter, with one Australia-based user claiming that they could no longer stake their crypto due to regional issues. Another claimed that flexible earn was no longer available in Australia, to which the Binance support team responded to look into the issue.
Earlier in February, Australia bolstered its watchdogs for the crypto space as a part of its “multi-stage” plan to fight scams.
