Binance Australia has been fined 10 million Australian dollars, equivalent to about 6.9 million US dollars, by the Federal Court of Australia, according to reports from March 27. The company operates locally under the name Oztures Trading Pty Ltd.
The penalty follows findings by the Australian Securities and Investments Commission, which revealed that Binance Australia’s derivatives platform incorrectly classified more than 500 investors as wholesale clients.
Misclassification and Investor Losses
ASIC stated that the issue occurred between July 2022 and April 2023, during which affected users were given access to high risk crypto derivatives products. As a result, investors recorded combined losses exceeding 12 million Australian dollars, or about 8.2 million US dollars.
Local reports also indicated that the company acknowledged major shortcomings in its onboarding procedures and staff training. Clients attempting to qualify as sophisticated investors were reportedly allowed unlimited attempts at a multiple choice quiz until they passed, enabling them to be incorrectly approved.
In addition, senior compliance personnel did not provide sufficient oversight or properly review applications, which further weakened the classification process.
One case highlighted a user who claimed to be an exempt public authority without supplying verification, yet was still approved by Binance as a professional investor.
Compensation and Regulatory Response
The exchange had already paid around 13.1 million Australian dollars, roughly 12 million US dollars, in compensation to affected users under ASIC supervision in 2023.
According to Joe Longo, Binance failed to implement essential compliance controls and improperly approved hundreds of applications for complex investment products. He noted that more than 85 percent of the platform’s Australian users were exposed to high risk offerings they should not have been able to access, without proper protections, leading to millions in losses for retail investors.
Longo emphasized that the issue went beyond a procedural failure, stating that it directly contributed to significant financial harm for clients.#crypto#cryptonews https://coinsignals.net https://t.me/coinsignalpublic
