Binance said it has informed the impacted users and they would be fully compensated for their losses, according to its statement.
Cover art/illustration via CryptoSlate
Binance said it has closed the derivatives position of a “small number of Australian users,” which it had wrongly classified as “wholesales investors.”
The crypto exchange said it followed Australian regulations by informing the affected users and immediately closed down their derivatives position.
Binance added:
“We have already contacted all impacted users and will fully compensate them for their losses incurred while trading derivatives on Binance.”
The notifications sent to some affected users urged them to provide new information or evidence showing they meet the requirements to be classified as a “Wholesale Investor.”
Under Australian laws, wholesale investors have the financial resources that allow them to take a long-term approach to their investment decisions. They are believed to be more sophisticated and professional in their approach to trading.
Meanwhile, following the news, the flagship digital asset Bitcoin (BTC) dumped to $23,791 before rising to its current value of $24,071, according to CryptoSlate’s data.
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