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Binance Closed Derivative Positions of 500 Australian Users, Will Compensate Them for Losses
Only "wholesale" traders are allowed to trade such products on Binance Australia.
Updated Feb 23, 2023, 7:56 p.m. Published Feb 23, 2023, 1:16 p.m.
Binance said on Thursday that it had incorrectly tagged 500 Australian users as "wholesale investors," resulting in their derivative positions being unceremoniously closed.
Documents show Binance Australia has historically not allowed retail traders to trade futures and financial derivatives products on the platform in accordance with local regulations. Only "wholesale" traders are allowed to trade such products on Binance Australia.
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"We have already contacted all impacted users and will fully compensate them for their losses incurred while trading derivatives on Binance," Binance said in a tweet.
Our team identified a small number of Australian users who were incorrectly classed as ‘Wholesale Investors’ on Binance.
— Binance (@binance) February 23, 2023
As per Australian regulation, we were required to inform these users and close any of their own derivative positions with immediate effect.
Later on Thursday, Binance tweeted that the action affected 500 Australian users and that it was "in contact with the affected users to firm up our compensation plans for them."
However, bitcoin and the broader crypto market slid. Bitcoin dropped 2.1% against the Australian dollar and a relatively smaller 1.5% against the U.S. dollar at writing time.
UPDATE (Feb. 23 19:56 UTC): Updated that the number of affected users was 500, per Binance's tweet.
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