The news of the investigation comes after the Bitcoin exchange incorrectly classified 500 users as ‘wholesale investors’. As Kriptokoin.com, we have compiled the details of the investigation launched for the famous Bitcoin exchange in Australia for you.
Bitcoin exchange faces scrutiny from ASIC
The Australian Securities and Investment Commission (ASIC) is reviewing Binance Australia’s derivatives services, as the cryptocurrency exchange closed derivative positions with some users being misclassified as ‘wholesale investors’.
An ASIC spokesperson said in a media release that the regulatory investigation includes a ‘targeted review’ of the crypto exchange’s ‘classification of retail customers and wholesale customers’. In addition, it was emphasized in the statement that Binance did not make an official statement to the Australian regulatory authorities about what happened:
“ASIC became aware of social media posts stating that Binance had mistakenly classified an Australian consumer group as wholesale investors. In accordance with its obligations under the Australian Financial Services License, these matters have not yet been reported to ASIC.”
Binance CEO made a statement
Changpeng Zhao, the CEO of Binance, confirmed in a successive tweet that all affected users will be compensated. Cryptocurrency exchange Binance does not offer derivatives to its retail customers in Australia, according to Australian regulatory standards. Also, as seen on its website, the Bitcoin exchange categorizes high net worth individuals or controlled entities, professional investors, large corporations, sophisticated investors, related establishment companies and a few other wholesale clients.
To qualify as a high net worth client in Australia, individuals must have a net worth of at least AUD 2.5 million or a gross annual income of at least AUD 250,000 in each of the last two financial years. To qualify, however, such customers must be presented with a signed wholesale customer acceptance statement confirming that they meet at least one of the criteria listed, and a copy of the certificate issued by an authorized accountant within the last two years.
https://twitter.com/cz_binance/status/1628754441837879297
Binance is the largest cryptocurrency exchange in terms of trading volumes. However, it has traded more than $20.1 billion in spot crypto and over $50.1 billion in derivatives trades in the last 24 hours. It has also recently been forced to increase regulatory scrutiny on the exchange and obtain licenses to support its global expansion.
The Australian unit of the exchange operates under an Australian Financial Services (AFS) license. Finally, its offerings to wholesale investors in the country include cryptocurrency contracts for spreads (CFDs) released last year.
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