Binance Australia Investigated For Closing Accounts

CANBERRA, AU – A spokesperson for the Australian Securities and Investments Commission (ASIC) announced Friday that ASIC would launch an investigation into Binance Australia after the company unexpectedly closed 500 user accounts on Thursday.

Customers affected by the closures were retail traders who had been incorrectly tagged as “wholesale investors” using the platform’s derivatives services. Australian law only permits wholesale investors from trading derivatives, not retail traders. 

Per Australian law, Binance said it had to “inform these users and close any of their own derivative positions with immediate effect.” However, the spokesperson for ASIC said that Binance “has not yet reported these matters to ASIC in accordance with its obligations under its Australian Finance Services License.”

On Thursday, Binance tweeted that they are communicating with the affected customers and will compensate them for their losses.

500 users were affected by this remediation, which was a necessary action to ensure we stay compliant with local laws. We serve over 120 million users globally and every user is important to us. We are in contact with the affected users to firm up our compensation plans for them.

— Binance (@binance) February 23, 2023

In September 2022 ASIC extended its crypto futures and derivates ban for retail traders until 2031.