Binance's Australian derivatives division fined $6.9 million for compliance and customer access violations

The Federal Court of Australia ordered Binance's Australian derivatives division (i.e., Oztures Trading Pty Ltd) to pay a fine of AUD 10 million (approximately USD 6.9 million).

During the period from 2022 to 2023, the entity incorrectly classified over 85% of local customers as wholesale investors, resulting in 524 retail customers being exposed to high-risk crypto derivatives without statutory consumer protections, leading to trading losses of approximately AUD 8,660,000 (about USD 5.9 million) and fee losses of AUD 3,900,000 (about USD 2.7 million). Joe Longo, Chairman of the Australian Securities and Investments Commission (ASIC), stated that Binance failed to establish basic compliance review mechanisms and incorrectly approved hundreds of wholesale investor applications. According to the fact statement submitted to the court, Binance acknowledged flaws in its customer onboarding process, allowing applicants to repeatedly take the eligibility test until they passed, and that senior compliance personnel inadequately reviewed application materials. Binance admitted to six violations, including failing to provide product disclosure statements to retail customers, not conducting target market assessments, and not maintaining a compliant internal dispute resolution system. This fine is in addition to approximately AUD 13.1 million (about USD 9 million) in customer compensation previously supervised by ASIC. The entity's Australian financial services license was revoked in April 2023.