The Australian Securities and Investments Commission (ASIC), the country's financial regulator, launched a targeted review of Binance.
The investigation covers Binance Australia Derivatives' financial services business and the popular crypto exchange's classification of retail and wholesale clients in Australia.
The move came right after Binance closed the positions of 500 users in Australia.
- The crypto exchange showed an error in how the accounts were labeled as the reason for the liquidations of the positions.
- According to a Twitter post from Binance, the platform incorrectly labeled some Australian users as "Wholesale Investors" rather than "Retail Investors."
- ASIC pointed out that Binance did not contact the Australian regulator directly about the error.
- On the other hand, Binance stated that it informed 500 users affected by the move and would compensate for any possible losses arising from the error.
Australian law defines wholesale investors as someone with more trading experience and potentially more funds.
- In the country, investors who do not meet the requirements to be wholesale clients are classified as retail clients and cannot trade derivatives by law.
