The Australian Securities and Investments Commission (ASIC) has filed legal action against Binance Australia Derivatives, accusing the company of misclassifying over 500 retail investors as wholesale clients.
Between July 2022 and April 2023, this classification error allegedly deprived these investors of essential consumer protections typically provided under Australian financial services regulations.
More than 500 retail clients of Oztures Trading Pty Ltd, trading as Binance Australia Derivatives, were denied important consumer protections after being misclassified as wholesale clients, ASIC alleges in documents filed in the Federal Court.
[https://t.co/nw2TxSRR6x](https://t.co/nw2TxSRR6x)
pic.twitter.com/Sm9nyBWjjE
— ASIC Media (@asicmedia) December 18, 2024
### ASIC Focus on Compliance and Consumer Protection in Crypto Market
The complaint by ASIC highlights the regulator’s concerns regarding appropriate compliance policies in the rapidly growing bitcoin market, particularly with regard to high-risk derivative products.
In response to these claims, Binance has already compensated the affected clients with approximately A$13.1 million (US$8.29 million). Although this compensation is significant, it does not absolve the exchange from further legal responsibilities.
Emphasizing the need for strict compliance policies and precise client classification, ASIC is currently investigating additional penalties, disclosures, and adverse publicity orders against Binance. This case also underscores ASIC’s broader legislative efforts to uphold market integrity throughout the digital asset ecosystem.
The legal action against Binance is part of a larger initiative by ASIC aimed at ensuring consumer protection within Australia’s rapidly expanding crypto market through strict adherence to compliance regulations.
Following ASIC’s civil procedures, another notable case in December 2024 saw a local operator of Kraken fined A$8 million by Australia’s federal court. These actions send a clear message from the regulator: non-compliance will not be tolerated, and consumer rights must be upheld at all costs.
This latest discovery coincides with a critical moment as regulatory oversight of digital asset products intensifies across the board.
The focus on Binance Australia Derivatives serves as a reminder of the challenges faced by global exchanges operating in regulated markets, particularly regarding consumer protection systems and compliance with local laws.
While addressing structural issues in the digital asset sector, ASIC’s efforts aim to provide a safer environment for retail investors.
In addition, CNF previously reported that ASIC had published draft rules outlining the applicability of the Corporations Act 2001 to digital assets. This new approach is designed to enhance consumer protection for digital asset services and raise compliance standards.