Australia's Federal Court has ordered Oztures Trading Pty Ltd, trading as Binance Australia Derivatives, to pay an AUD $10 million (about $6.9 million USD) penalty after the exchange admitted to exposing 524 retail investors to high-risk crypto derivative products without required consumer protections.
The misclassified client group incurred AUD $8.66 million (about $6 million) in trading losses and paid AUD $3.89 million ($2.67 million) in fees. Of the 524 misclassified clients, 460 were incorrectly classified as meeting the Sophisticated Investor Test, 33 as meeting the Individual Wealth Test, 26 as professional investors, 4 as Related Body Corporate, and 1 as meeting the Large Business Test.
In one example, Binance assessed an individual as a professional investor based solely on their claim to be an "exempt public authority," without adequate verification.
Decrypt reached out to Binance for comment but did not immediately receive a response.
“Binance failed to set up basic compliance checks and incorrectly approved hundreds of applications for complex, wholesale investor products,” ASIC Chair Joe Longo said, in a statement. “Binance’s shortcomings left more than 85% of their Australian customer base exposed to high-risk products they should have never been able to access, and without important consumer protections or rights, costing retail investors millions.”
