Binance Australia Faces Legal Heat Over ‘Woeful’ Retail Client Safeguards

Watchdog claims crypto exchange mishandled local user accounts and operated without proper licensing

  • ASIC files legal action against Binance Australia Derivatives for misclassifying 83% of retail clients as wholesale investors.
  • Over 500 Australian customers were denied consumer protection measures between July 2022 and April 2023.
  • Binance paid approximately $13 million in compensation to affected clients in 2023.
  • Australian regulator canceled Binance’s derivatives license in April following internal review.
  • Case highlights broader regulatory enforcement in Australian crypto markets, including recent $5.1 million Kraken fine.

Australian Financial Watchdog Targets Binance Over Consumer Protection Breaches

- Advertisement -

The Australian Securities and Investments Commission (ASIC) launched legal proceedings against Binance Australia Derivatives for allegedly misclassifying retail investors, affecting 83% of its Australian customer base between July 2022 and April 2023.

Consumer Protection Failures

According to ASIC’s official statement, more than 500 retail clients were incorrectly labeled as wholesale investors, depriving them of essential protections under Australian financial laws. These protections include:

  • Product Disclosure Statements (PDS) – detailed product information documents
  • Target Market Determinations (TMD) – product suitability assessments
  • Access to internal dispute resolution systems

ASIC Deputy Chair Sarah Court stated: _”Crypto derivative products are inherently risky and complex, so it is critical that retail clients are classified correctly.”_

Regulatory Response and Consequences

The investigation intensified after Binance publicly acknowledged the classification errors on social media in February 2023. Key developments include:

  • ASIC’s license cancellation for Binance Australia Derivatives in April 2023
  • Regulatory office searches at Binance’s Australian locations
  • $13 million compensation payment to affected clients

The legal action follows ASIC’s broader crypto sector oversight, exemplified by its recent enforcement against Kraken’s Australian operation, resulting in a $5.1 million penalty for illegal margin trading services to retail customers.

The regulator introduced a new INFO-225 consultation paper for public feedback through February 2025, aiming to strengthen cryptocurrency market regulations in Australia.

- Advertisement -

✅ Follow BITNEWSBOT on Facebook, LinkedIn, X.com, and Google News for instant updates.

Previous Articles:

- Advertisement -

Latest News

Shopify, Coinbase Launch USDC Payments; Mastercard Expands Crypto Access

Shopify and Coinbase allow merchants to accept USDC stablecoin payments, making crypto transactions easier...

Coinbase Launches Wrapped ADA and LTC on Base, COIN Hits New High

Coinbase has introduced wrapped versions of Cardano (ADA) and Litecoin (LTC) on its Ethereum...

ClickFix Attacks Surge 517% in 2025, Fake CAPTCHAs Spread Malware

ClickFix attacks using fake CAPTCHA verifications have risen by 517% in early 2025, according...

FHFA Orders Fannie, Freddie to Consider Crypto as Mortgage Collateral

The U.S. Federal Housing Finance Agency ordered Fannie Mae and Freddie Mac to consider...

Retail Investors Can Now Buy Tokenized Shares of SpaceX via Blockchain

Retail investors can now buy blockchain-based fractional shares in SpaceX through Republic. These digital tokens...

Must Read

Buy Domain With Bitcoin: Top 8 Domain Registrars That Accept Bitcoin And Crypto

You are here because you want to buy a domain with bitcoin, right? If you are looking for domain registrars that accept bitcoin or...