The Federal Court has ordered Oztures Trading Pty Ltd, trading as Binance Australia Derivatives, to pay a A$10 million pecuniary penalty for misclassifying more than 85% of its Australian client base over nine months.
The Australian Securities and Investments Commission announced the penalty on Friday, saying the misconduct exposed 524 retail investors to high-risk crypto derivative products without required protections between July 2022 and April 2023. The misclassified group incurred A$8.66 million in trading losses and paid A$3.89 million in fees.
How the onboarding failed
Binance admitted in a Statement of Agreed Facts that clients seeking sophisticated investor status could make unlimited attempts at a multiple-choice quiz until they achieved a passing score. Senior compliance staff provided inadequate oversight of applications and supporting documentation.
Of the 524 misclassified clients, 460 were wrongly assessed under the Sophisticated Investor Test, the platform’s main onboarding route.
Once classified as wholesale clients, the users fell outside the retail protections Australian law requires. ASIC said Binance failed to provide a Product Disclosure Statement, make a Target Market Determination, maintain a compliant dispute resolution system, and ensure services were provided efficiently, honestly and fairly.
“This wasn’t just a technical breach, it directly resulted in over $12 million in client losses,” ASIC Chair Joe Longo said.
A Binance spokesperson told Reuters the issue was “self-identified, reported to ASIC, and fully remediated in 2023.” Oztures ceased its derivatives business and voluntarily surrendered its Australian Financial Services licence in April 2023.
The A$10 million penalty comes on top of approximately A$13.1 million in compensation ASIC oversaw to affected clients in 2023. The court also ordered Binance to contribute to ASIC’s costs.
Longo described the outcome as a warning to global firms: “All financial services companies must follow the law from day one. This includes financial services that relate to crypto and digital assets.”
