Australian Securities and Investments Commission (ASIC) has brought action in the Federal Court against Oztures Trading Pty Ltd, trading as Binance Australia Derivatives, for alleged consumer protection failures that affected more than 500 retail customers.
ASIC alleges that Binance misclassified 505 Australian retail investors, representing 83% of its local customer base, as wholesale customers between July 7, 2022 and April 21, 2023. There is.
This misclassification reportedly denied customers important consumer rights and protections, including access to product disclosure statements, target market determination based on design and distribution obligations, and a compliant internal dispute resolution system.
ASIC vice-chair Sarah Court said Binance’s compliance systems were “woefully inadequate” and exposed hundreds of customers to high-risk, speculative crypto derivatives products without adequate safeguards. said.
He pointed out that many customers suffered significant financial losses, and Binance, under the supervision of ASIC, paid approximately US$13 million in compensation to affected individuals in 2023.
“Our lawsuit alleges that Binance’s compliance systems were woefully inadequate, exposing more than 500 customers to high-risk speculative products without adequate consumer protections in place. Many of these customers suffered significant financial losses. In 2023, we oversaw the payment of approximately US$13 million in compensation to affected customers by Binance.
As crypto derivative products are inherently risky and complex, it is important to correctly classify retail customers. These classifications ensure that you have the necessary consumer protection and the information you need to make informed investment decisions. ”
the court said.
The regulator further alleges that Binance failed to ensure that financial services were provided efficiently, honestly, and fairly.
Additionally, ASIC alleges that Binance failed to comply with the terms of its license and failed to properly train its employees to ensure their competency.
This legal action coincides with ASIC’s ongoing efforts to clarify regulatory requirements in the digital asset space.
Earlier this month, the regulator released the following report: Consultation form We outline proposed updates to the Guidelines on Cryptoassets and Related Products to provide greater clarity on how the definition of financial instruments applies under current law.
ASIC is seeking penalties, declarations and adverse publicity orders in its case against Binance.
Featured image credit: Edited from freepic
