Australian Securities and Investments Commission (ASIC) Complaint against Oztures Trading Ltd – Operator Binance Australian derivatives – more than inadequate customer protection measures.
According to a December 18 Statementthe regulator claims that more than 500 retail investors were misclassified as wholesale customers, depriving them of vital consumer guarantees.
ASIC charges
ASIC alleged that between July 2022 and April 2023, Binance offered crypto derivatives products to 505 Australian retail investors, representing 83% of its local clients, while classifying them as wholesale clients.
This classification bypassed mandatory protections under Australian financial law, such as access to disclosure statements and dispute resolution mechanisms.
The regulator accused Binance of failing to issue a product disclosure statement, failing to define the target market for its products, and not providing an adequate internal complaint resolution system.
ASIC deputy chief Sarah Court stressed that Binance's actions were likely to cause significant financial harm to its customers. He added that Binance had already paid $13 million in compensation to some affected users in 2023.
The Court reiterated that proper classification of retail customers is essential to ensure that they receive the information necessary to make an informed decision in a highly risky market. He added:
“Many digital assets and related products are financial products under current law. We are consulting with the sector to improve regulatory clarity and ASIC will continue to use a range of regulatory and enforcement tools to protect consumers and maintain market integrity in the digital asset sector.
ASIC said it was seeking penalties, notices and adverse publicity orders.
The complaint is ASIC's latest move to enforce compliance among cryptocurrency exchanges. Last week, the grade regulator a A fundamental legal victory Bittrade fined the operator behind the head Kraken Australia, $5 million for violating regulations related to illegal credit facilities.
ASIC's actions reflect its commitment to holding exchanges accountable to Australian financial laws.
