Binance News: Users of Binance Australia Derivatives were notified by the digital asset platform on February 23 that it was starting to close some derivatives accounts and holdings. Multiple tweets indicate that users who didn’t meet the criteria for being a wholesale investor were informed that their positions would be closed, and that they couldn’t use the crypto derivatives platform.
Binance closes multiple trading accounts
Only high-volume institutional investors and high-volume traders can trade in cryptocurrency futures on the Binance platform. The mismatch was discovered by the crypto giant after an examination of the onboarding process. These accounts, which were mislabeled at the beginning, have now had their positions closed. These accounts will also be closed and their access to Binance’s futures market will be lost.

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Users were informed that in order to continue using Binance Australia’s derivatives platform they must submit the required evidence to prove that they meet the requirements of the role of “wholesale investors”. The letter also explained that Binance Australia Derivatives was working on a compensation plan for customers who are owed refunds by the company.

Our team discovered a few Australian users incorrectly classified as ‘Wholesale Investors’ on Binance.
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We were required by Australian law to notify these users and immediately close any derivative positions they may have.
— Binance (@binance), February 23, 2023
Customers commented on Binance’s tweet on Twitter. One user from Australia stated that they could not stake their cryptocurrency due to complications in their country. Another user claimed that flexible earn was no more available in Australia. This prompted Binance’s support team to respond that they would investigate.
CZ Announces Compensation

Changpeng Zhao, also known as “CZ”, addressed customers via Twitter and assured them that the primary concern of the cryptocurrency exchange was and will remain the protection of their funds. CZ stated that any losses incurred as a result the forced closing of trading positions would be fully compensated. He was quoted as saying:
We will review the situation to determine if/when futures can be re-opened in Australia. Thank you for your understanding.
The crypto exchange introduced Binance Australia Derivatives in July 2022. The trading services offered by the platform were initially restricted to Australian wholesale customers. This policy complies with section 761GA of Australia’s Corporations Act of 2001.

To be considered wholesale clients by the exchange, users must pass at least one of the tests. This includes a wealth check, professional investor test (large business test), sophisticated investor test, and other verifications. The wealth test requires that the user proves that they have a net worth at least AUD $2.5m or that they have earned at minimum AUD $250,000 per year in gross income during the past two financial years.
In response to this Binance news, BNB, the exchange’s native token fell prey to a widespread FUD. As things stand now, BNB’s value is at $310. This represents a 0.5% decrease in the last hour, compared with a decrease of 3.5% over seven days.
Also read: CZ says to reconsider opening Binance Derivatives in Australia

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