• Binance Australia Derivatives sent notifications of account closures to users it wrongly classified
• The Australian Securities and Investments Commission (ASIC) announced they would be conducting a „targeted review“ of Binance’s local derivatives operations
• Binance took to social media to clarify the incident, saying that it closed derivatives positions and accounts for some users who were incorrectly classified as „wholesale clients“
Binance Australia Derivatives Account Closures
Binance Australia Derivatives sent an abrupt message to a select group of users on Feb. 23, saying it would be immediately closing their accounts due to a false classification of some users as „wholesale clients.“ This incident caused a flurry of responses from users on social media.
ASIC Review
The next day, the Australian Securities and Investments Commission (ASIC) announced they would be conducting a „targeted review“ of Binance’s local derivatives operations. According to a statement from a spokesperson of the regulator on Feb. 24, the review will include the company’s „classification of retail clients and wholesale clients.“
Social Media Response
The spokesperson added that ASIC was aware of Binance’s social media posts which were made shortly after users began posting screenshots of the notices on Twitter. Binance took to social media to clarify the incident, saying that it closed derivatives positions and accounts for some users who were incorrectly classified as „wholesale clients.“ Currently the platform is only available to wholesale investors.
SEC Objection
This comes following the U.S. Securities Exchange Commission filing an objection to Binance US‘ bid for Voyager assets.
Conclusion
As regulators in Australia are now looking into this matter, it remains unclear how this incident will affect Binance’s operations in Australia.