Investigation of its onboarding services by Binance Australia Derivatives revealed that the company had misclassified end users as wholesale investors, which led the company to immediately terminate all accounts.
Binance Australia Derivatives users reported abrupt notifications sent by the digital asset platform on Feb.23, informing them that it was beginning to terminate a number of derivatives holdings and accounts.
Users who did not satisfy the criteria to be a “wholesale investor” were informed that all of their positions would be closed and that they would no longer be allowed to access the Binance Australia Derivatives Platform, according to screenshots shared by a number of users on Twitter.
Users were advised that they must provide the required documentation to meet the criteria for “wholesale investor” status in order to continue utilizing Binance Australia’s derivatives platform.
The statement stated that because the subsequent steps complied with Australian laws, users were contacted right away and the impacted accounts were closed.
The notification went on to explain that Binance Australia Derivatives is developing a plan for correcting the situation and compensating consumers who are due refunds as a result of the change.
Chanpeng Zhao, CEO of Binance, also reiterated that users would receive compensation for any losses experienced as a result of the forced closing of their account and positions.
Users will be compensated for any loss incurred due to the force close of positions. Protecting users is #1 priority @Binance.
— CZ
We will review the situation and see if/when we can re-open futures offerings in Australia. Thank you for your understanding, & please ignore FUD (4). https://t.co/dRG0u8VEuFBNB (@cz_binance) February 23, 2023
The official trading name of Oztures Trading Pty Ltd. is Binance Australia Derivatives. The relationship to Binance is that Oztures’ corporate authorized representative is the local Australia chapter of Binance. It is explicitly stated in its official summary, which was released in July 2022, that derivatives items are solely available to Australian wholesale customers.