Binance Closed Derivative Positions of Some Australian Users, Will Compensate Them for Losses
Binance said on Thursday that it had incorrectly tagged some 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.
"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.
However, bitcoin (BTC) and the broader crypto market slid amid on Crypto Twitter of Binance closing the future positions did the rounds. Bitcoin dropped 2.1% against Australian Dollars and a relatively smaller 1.5% against U.S. dollars at writing time.