The Federal Court has ordered Oztures Trading Pty Ltd, operating as Binance Australia Derivatives, to pay a A$10 million civil penalty for widespread failures in classifying clients during a nine-month period in 2022–2023. The company, part of the global Binance Group—the world’s largest cryptocurrency exchange by trading volume—misclassified more than 85 per cent of its Australian customers, allowing hundreds of ordinary retail investors to access high-risk crypto derivative products without the legal safeguards designed to protect them.
Court documents show that between July 2022 and April 2023, Binance Australia Derivatives improperly categorized 524 retail clients as wholesale or sophisticated investors.
As a result, these individuals were denied key consumer protections, including product disclosure statements and target market determinations.
The misclassifications led to A$8.66 million in trading losses and A$3.89 million in fees paid by the affected clients—totaling more than A$12 million in direct financial harm.
ASIC’s investigation revealed serious shortcomings in the firm’s onboarding procedures.
Staff training was inadequate, and clients attempting to qualify as sophisticated investors were permitted unlimited attempts at a multiple-choice quiz until they passed.
Senior compliance officers failed to properly review applications or supporting documents.
In one documented case, a client was accepted as a professional investor simply after declaring themselves an “exempt public authority,” with no meaningful verification.
The company admitted breaching multiple provisions of the Corporations Act, including requirements to provide financial services efficiently, honestly and fairly, maintain a compliant dispute resolution system, and meet Australian Financial Services license conditions.
It also conceded it had not ensured staff competency or supplied required disclosures to retail clients.
In addition to the penalty, Justice Moshinsky ordered Binance Australia Derivatives to cover ASIC’s legal costs.
The fine follows approximately A$13.1 million in compensation the firm paid to affected clients in 2023 under ASIC supervision.
The regulator had earlier cancelled the company’s AFS licence in April 2023 after launching a targeted review of its client classification practices.
ASIC Chair Joe Longo described the case as a stark reminder for global financial firms entering the Australian market.
“Binance failed to implement basic compliance checks and wrongly approved hundreds of applications for complex products,” he said.
“More than 85 per cent of their Australian customer base was left exposed to high-risk derivatives they should never have accessed, costing retail investors millions. This was not a technical breach—it directly caused over $12 million in client losses.”
Longo added that all financial services providers, particularly those in crypto and digital assets, must establish robust onboarding systems from day one.
ASIC has signaled it will continue using licensing, guidance and enforcement tools to protect consumers in the digital asset sector, citing similar recent actions against other international crypto platforms. The outcome underscores growing regulatory scrutiny of offshore crypto operators in Australia and the high cost of inadequate client verification processes.