Binance Australia Derivatives, operated by Oztures Trading Pty Ltd, is facing legal action from the Australian Securities and Investments Commission (ASIC) over allegations of improperly classifying retail clients as wholesale clients. This move is said to have deprived these individuals of consumer protections required by Australian financial laws.
Binance Australia Derivatives is currently facing a lawsuit filed by ASIC, covering a period between July 2022 and April 2023. During this time, it is estimated that 83% of Binance's Australian client base was negatively impacted. ASIC claims that Binance failed to meet legal obligations by not providing necessary disclosure documents and access to dispute resolution mechanisms for retail clients trading crypto derivatives.
The regulator also accuses Binance of inadequate compliance systems and exposing clients to high-risk speculative products without proper safeguards.
In an effort to address the issue, Binance has compensated affected clients with approximately $13 million. However, the lawsuit suggests that the damage may extend beyond financial restitution.
ASIC's actions against Binance are part of a broader effort to enhance oversight in the digital asset space. It is worth noting that Binance has faced legal and regulatory challenges in multiple jurisdictions. The outcome of the Australian lawsuit may have implications for regulatory approaches in other countries as well.