Australian Securities and Investments Commission has filed a lawsuit against Binance Australia Derivatives alleging failure to comply with consumer protections. Binance Australia derivatives exchange trading as Oztures Trading Pty Ltd misclassified over 500 clients as wholesale clients.
ASIC Files Lawsuit Against Binance Australia Derivatives
In a press release on December 18, the Australian regulator ASIC said it has sued Binance Australia Derivatives. The regulator alleges that the exchange offered crypto derivative products to 505 retail investors, misclassifying them as wholesale.
From July 7, 2022–April 21, 2023, Australian retail investors were denied critical consumer protections under Australian financial services laws. This represents 83% of its Australian client base.
ASIC claims that retail investors trading crypto derivative products need consumer protections, including disclosure statement and compliant dispute resolution scheme access. Also, the regulator highlighted that Binance Australia Derivatives also failed to make Target Market Determination (TMD) under design and distribution obligations.
“Binance allegedly failed to ensure that the services it provided under its Australian financial services licence were provided efficiently, honestly and fairly,” said ASIC Deputy Chair Sarah Court.
In addition, it added that Binance’s compliance systems were inadequate and exposed investors to high-risk, speculative products without consumer protections. Besides, many clients have suffered significant financial losses. The exchange needs to comply with the conditions of its license, claims the regulator.
Binance’s Arm Faced Problems in 2023
Binance’s Australian arm has a history of regulatory challenges and conflicts with the regulator. In June 2023, Binance Australia ceased Australian dollar (AUD) deposits and withdrawals by bank transfer.
Earlier, Australian Securities and Investments Commission canceled the derivatives license of Binance Australia Derivatives in April. It began a probe against the exchange for mistakenly categorizing traders as wholesale investors.
Recently, Australian regulator ASIC released draft guidance offering greater clarity on digital asset regulation and current financial product definitions. However, it faced criticism from crypto industry experts, warning exodus of firms from the country.
The post Binance Australia Derivatives Exchange Sued By ASIC appeared first on CoinGape.
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