Key Points:
A day ago, Twitter users published pictures that demonstrated how Binance had closed numerous Australian users’ derivative holdings. Immediately after, Binance said that 500 Australian users had been wrongly classified as “wholesale investors.” Their derivative positions were thus quickly closed.
Moreover, it stated that the exchange had contacted affected individuals and would completely reimburse them for their losses. The roles were purportedly closed in accordance with Australian laws. Retail traders have historically been prohibited from trading futures and financial derivatives products by the leading cryptocurrency company. On Binance Australia, only “wholesale” dealers are permitted to trade such items.
The examination relates to the exchange’s “classification of retail clients and wholesale clients,” a spokesman for AISC said. The spokeswoman for the agency stated the regulator “is aware of Binance’s social media posts overnight stating that it had incorrectly classed a group of Australian consumers as wholesale investors.”
“It has not yet reported these matters to ASIC in accordance with its obligations under its Australian financial services license,” the spokesperson added.
A spokesman for the company, meanwhile, asserted that the company is “committed” to abiding by all pertinent Australian legislation. The company’s executive CZ just tweeted that:
Regulators from all around the world have been closely examining cryptocurrency firms after the collapse of FTX. According to recent reports, Binance is getting ready to pay fines to make up for its prior transgressions.
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