TL;DR:
Australia’s Federal Court ordered Oztures Trading Pty Ltd, operating under the name Binance Australia Derivatives, to pay a penalty of AUD $10 million, equivalent to $6.9 million, after admitting it misclassified more than 85% of its local client base. The events took place between July 2022 and April 2023, a period during which 524 retail investors were treated as wholesale clients and exposed to high-risk cryptocurrency derivative products without the corresponding legal protections.
The Australian Securities and Investments Commission (ASIC) detailed that this group of clients accumulated $8.66 million in trading losses and paid an additional $3.89 million in fees. In a statement of agreed facts submitted to the court, Binance acknowledged multiple compliance failures, including failing to provide product disclosure statements to retail clients, failing to establish a target market determination, and failing to maintain an internal dispute resolution system in accordance with applicable regulations.
Among the most serious breaches highlighted by the court was a flawed assessment system that allowed applicants to retake a multiple-choice questionnaire an unlimited number of times until achieving the score required to be classified as sophisticated investors. Judge Moshinsky also ordered Binance to contribute to ASIC’s legal costs.
The penalty comes on top of approximately $13.1 million in compensation that the subsidiary already paid to affected clients in 2023, supervised by the regulator. Joe Longo, chair of the ASIC, stated that the case was not based on a merely technical infraction, but directly resulted in multi-million dollar losses for investors who should never have had access to those products. Longo also warned financial services firms seeking to operate in Australia that they must comply with the law from day one, including those offering services related to crypto assets.
