Australian Regulator Takes Legal Action Against Binance Australia Derivatives
The Australian Securities and Investment Commission (ASIC) recently filed a lawsuit against Oztures Trading Ltd, the operator of Binance Australia Derivatives, citing inadequate customer protection practices.
Allegations by ASIC
- ASIC claims that over 500 retail investors were misclassified as wholesale clients by Binance Australia Derivatives.
- These misclassifications denied the investors crucial consumer safeguards required by Australian financial laws.
- Between July 2022 and April 2023, Binance offered crypto derivative products to 505 Australian retail investors, representing 83% of its local client base.
Failures by Binance Australia Derivatives
- Binance failed to issue a product disclosure statement to its clients.
- The company did not determine a target market for its products.
- An adequate internal complaint resolution system was not provided by Binance.
ASIC’s Response
ASIC Deputy Chair Sarah Court emphasized that Binance’s actions likely caused significant financial harm to its clients. The regulator is seeking penalties, declarations, and adverse publicity orders in response to these violations.
Enforcement of Compliance
This legal action by ASIC is part of the regulator’s efforts to enforce compliance among crypto exchanges. In a recent case, ASIC fined Bit Trade, the operator of Kraken Australia, $5 million for regulatory breaches involving an unlawful credit facility.
ASIC’s actions demonstrate its commitment to upholding Australian financial laws and ensuring consumer protection in the digital asset sector.
