Australian Regulator Investigating Binance

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Binance has encountered difficulty with the ASIC while already dealing with regulatory issues in the U.S. 

Binance canceled specific traders’ futures contracts on Thursday who were mistakenly categorized as “wholesale investors.” The corporation also disclosed plans for compensation for the users impacted by the action.

Retail investors are prohibited from trading derivatives by the ASIC. As a result, to trade derivatives, Binance’s users must provide documentation confirming that they are wholesale investors. Meanwhile, the Australian regulator ASIC is launching a focused assessment of the company’s local derivatives business as a result of Binance’s move.

ASIC is “aware of Binance’s social media statements overnight saying that it had wrongly classified a subset of Australian customers as wholesale investors,” a representative for the agency said.

According to the spokesman, despite closing the derivative trades by ineligible traders, it has not yet finished reporting duties to authorities. The Australian regulatory agency will now look into Binance categorizing retail and wholesale clients.

The company’s CEO, Changpeng Zhao, made it clear that they are examining the circumstance. He also urged users to ignore FUD.

A wholesale client asserts that their holdings were also closed, contradicting Binance’s statement. They tweeted that they obtained a wholesale client certificate to satisfy the criteria but did not get prior notice or a grace period.

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