Binance Australia Derivatives has been ordered to pay a civil penalty of A$10 million after the Federal Court of Australia found a failure in the way the platform segregated customers from crypto derivatives trading.
Summary
- Australia fined Binance $10 million after 524 customers were wrongly marketed as high street investors.
- ASIC said Binance allowed users to retry queries without limits, weakening checks to access complex derivatives.
- Binance had already paid a compensation of A$13.1 million before the court issued a new sentence.
The decision adds to the upfront compensation paid to affected users and comes as Binance faces pressure from other markets in the region.
The Australian Securities and Investments Commission said a court ordered Oztures Trading Pty Ltd, which operated Binance Australia Derivatives, to pay a fine after it misplaced more than 85% of its Australian customer base over a nine-month period. ASIC said 524 investors were mistreated as customers of supermarkets between July 2022 and April 2023.
According to ASIC, those clients were given access to high-risk crypto derivatives without the consumer protection required for retail investors. The regulator said the group later recorded A$8.66 million in trading losses and paid A$3.89 million in cash.
ASIC said Binance admitted serious failings in customer onboarding and employee training. The administrator said some users can take unlimited multiple-choice questions until they reach a passing score that allows them to qualify as advanced investors.
The regulator also said senior compliance staff did not provide adequate oversight of customer applications and supporting documents. In one example cited by ASIC, Binance accepted a client as a professional investor after the individual described himself as a “liberal public authority” without sufficient verification.
In addition, the court sentence comes on top of the approximately A$13.1 million compensation that Binance Australia paid to affected clients in 2023 under ASIC’s supervision. Justice Moshinsky also ordered the company to contribute to ASIC’s legal costs.
ASIC Chairman Joe Longo said,
“Binance failed to establish basic compliance checks and improperly approved hundreds of applications for complex products, selling investors.”
Binance said the issue was self-identified, reported to ASIC, and fully fixed by 2023.
The Philippine travel adds to the region’s assessment
Binance also faced restrictions in the Philippines. Local outlet BitPinas reported in February that Binance’s main app is no longer available for download on the Philippine Google Play Store, while the exchange’s website remains blocked for many users.
BitPinas said the removal followed an earlier action by Philippine regulators against unauthorized offshore exchanges. The report said that searching for Binance on the Google Play Store redirected users to local and region-specific alternatives instead of the global app.
