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

Bitcoin, Crypto Rebound After Israel-Iran Crisis Spurs Market Jitters

Bitcoin and other cryptocurrencies recovered after a recent drop triggered by geopolitical tensions between Israel and Iran. The price of bitcoin moved back above $100,000...

Bitcoin Mining Profitability Jumps 18% in May Amid BTC Price Surge

Bitcoin mining profitability increased by 18.2% in May.The price of Bitcoin (BTC) rose by 20% during the same month.The network hashrate saw a 3.5%...

Attackers Abuse Docker APIs and Tor to Launch Cloud Cryptojacking

Attackers are exploiting misconfigured Docker APIs to mine cryptocurrency in cloud environments.They use the Tor network to hide their activities while deploying crypto miners.Attackers...

Mastercard joins Paxos Global Dollar Network to boost stablecoins

Mastercard has joined the Global Dollar Network, a stablecoin group run by Paxos.The move will allow Mastercard partners to issue, manage, and redeem the...

Crypto Markets Rally as Trump Brokers Iran-Israel Ceasefire

Altcoin prices rose sharply after Donald Trump announced a ceasefire between Iran and Israel. Major cryptocurrencies like Ethereum, Solana, XRP, and Bitcoin recovered recent losses. Experts...

Must Read

14 Ways On How to Make Money with Cryptocurrency

Many people want to make money with cryptocurrency because they have heard the success stories of people who became millionaires from zero.If you...