Binance Australia derivatives division fined US$6.9 million for compliance and customer access violations

The Federal Court of Australia ordered Binance's Australia derivatives division (OzturesTradingPtyLtd) to pay a fine of A$10 million (approximately US$6.9 million). Between 2022 and 2023, the entity mistakenly classified more than 85% of local customers as wholesale investors, resulting in 524 retail customers being exposed to high-risk crypto derivatives without statutory consumer protection, resulting in a trading loss of approximately A$8.66 million (approximately US$5.9 million) and a fee loss of A$3.9 million (approximately US$2.7 million). Joe Longo, chairman of the Australia Securities and Investments Commission (ASIC), said Binance had not established a basic compliance review mechanism and mistakenly approved hundreds of wholesale investor applications. According to the statement of facts submitted by the court, Binance admitted that there were flaws in the customer access process, allowing applicants to repeatedly participate in the qualification test unlimited times until they passed, and insufficient review of the application materials by senior compliance personnel. Binance admitted six violations, including failure to provide product disclosure statements to retail customers, failure to conduct target market assessments, and failure to maintain a compliant internal dispute resolution system. The fine was imposed in addition to the approximately A$13.1 million (approximately US$9 million) customer compensation previously supervised by ASIC. The entity's Australia financial services licence was cancelled in April 2023.