Binance Australia Derivatives Unit Fined $6.9 Million for Compliance and Client Onboarding Violations

Odaily News: The Federal Court of Australia has ordered Binance's Australian derivatives unit, Oztures Trading Pty Ltd, to pay a fine of 10 million Australian dollars (approximately $6.9 million). Between July 2022 and April 2023, the entity incorrectly classified over 85% of its local clients as wholesale investors. This led to 524 retail clients being exposed to high-risk crypto derivatives without the statutory consumer protections, resulting in trading losses of approximately 8.66 million AUD (about $5.9 million) and fee losses of 3.9 million AUD (about $2.7 million).

Joe Longo, Chair of the Australian Securities and Investments Commission (ASIC), stated that Binance failed to establish a basic compliance review mechanism and erroneously approved hundreds of wholesale investor applications. According to the statement of facts submitted to the court, Binance admitted to deficiencies in its client onboarding process, allowing applicants to retake the eligibility test an unlimited number of times until they passed, and that senior compliance personnel provided insufficient review of application materials.

Binance admitted to a total of six violations, including failing to provide retail clients with product disclosure statements, not conducting target market assessments, and failing to maintain a compliant internal dispute resolution system. This fine is imposed in addition to approximately 13.1 million AUD (about $9 million) in client compensation previously overseen by ASIC. The entity's Australian Financial Services License was revoked in April 2023.