Australian Securities and Investments Commission Secures $10 Million Penalty Against Binance Australia Derivatives

The Federal Court of Australia has ordered Oztures Trading Pty Ltd, operating as Binance Australia Derivatives, to pay a $10 million penalty following serious compliance failures that exposed retail investors to high-risk crypto derivative products.

According to Australian Securities and Investments Commission (ASIC), more than 85% of Binance’s Australian clients were incorrectly classified as wholesale investors between July 2022 and April 2023. This misclassification allowed 524 retail clients to access complex products without appropriate protections, resulting in over $12 million in trading losses and fees.

Onboarding Failures and Weak Oversight

Binance admitted to significant shortcomings in its onboarding processes, including allowing users to repeatedly attempt a quiz until qualifying as “sophisticated investors.” In addition, compliance oversight was inadequate, with insufficient verification of client information and poor staff training.

In one case, a client was incorrectly approved as a professional investor based solely on self-certification, without proper checks. The affected group recorded $8.66 million in trading losses and paid $3.89 million in fees.

Breaches and Regulatory Action

The company admitted to multiple breaches, including failing to provide required disclosures, lacking a target market determination, and not maintaining proper dispute resolution systems. It also failed to ensure services were delivered efficiently, honestly, and fairly, as required under Australian law.

ASIC Chair Joe Longo said the failures were not merely technical, but had direct financial consequences for investors.

The penalty follows approximately $13.1 million in compensation already paid to affected clients in 2023 under ASIC’s oversight. Binance also agreed to cover ASIC’s legal costs.

Broader Regulatory Message

ASIC stated the case sends a clear message to global financial firms, including crypto service providers, that they must meet regulatory obligations from the outset when operating in Australia.

The regulator added it will continue to use enforcement actions, licensing controls, and compliance measures to protect investors and maintain market integrity in the digital asset sector.