Australia fines local Binance unit $6.9M over client onboarding failures

An Australian court ordered Binance Australia Derivatives to pay $6.9 million after misclassifying retail clients and exposing them to high-risk crypto products.

The Federal Court of Australia has ordered Oztures Trading Pty Ltd, trading as Binance Australia Derivatives, to pay a 10 million Australian dollar ($6.9 million) penalty after the company admitted to misclassifying more than 85% of its Australian client base and exposing retail investors to high-risk crypto derivatives without required protections.

The Australian Securities and Investments Commission (ASIC) said the affected group included 524 retail investors who were wrongly treated as wholesale clients between July 2022 and April 2023. Those clients later incurred $6.3 million in trading losses and paid $2.6 million in fees.

Binance also admitted in a statement of agreed facts to multiple compliance failures, including not providing product disclosure statements to retail clients, not making a target market determination and not maintaining a compliant internal dispute resolution system.

The penalty comes on top of the around $9 million in compensation that Binance’s local derivatives unit was ordered to pay to affected clients in November 2023.

Binance did not immediately respond to Cointelegraph’s request for comment.

Related: White House clears review of proposal to allow crypto in 401(k) retirement plans

This is a developing story, and further information will be added as it becomes available.

Source: CoinTelegraph