According to its statement, Binance said that it had notified the affected users and promised to fully make up for any losses.
The “limited number of Australian users” whose derivatives positions were cancelled by Binance were misclassified by the cryptocurrency exchange as “wholesales investors,” according to Binance.
The cryptocurrency exchange said that by alerting the impacted users and immediately closing their derivatives position, it complied with Australian legislation. Binance said in a tweet
“We have already contacted all impacted users and will fully compensate them for their losses incurred while trading derivatives on Binance.”
Later on Thursday the crypto exchange tweeted that the action affected 500 Australian users and that it was ” in contact with the affected users to firm up our compensation plans for them”
Several of the impacted customers received letters encouraging them to provide updated information or supporting documentation demonstrating their eligibility to be labeled as “Wholesale Investors.”
Under Australian legislation, wholesale investors have the financial means to approach their investment decisions from a long-term perspective. They are thought to approach trading with a more professional and intelligent mindset.
Regarding the incident, Changpeng Zhao, the co-founder of Binance assured on Twitter that the crypto exchange’s top priority continues to be protecting users.
Following the news, Bitcoin (BTC), the leading digital asset, dropped to $23,791 before rising to its current value of $24,071, according to statistics from CryptoSlate.
