Australia fines local Binance unit $6.9M over client onboarding failures

Update March 27, 11:53 am UTC: This article has been updated to include a comment from a Binance spokesperson.

The Federal Court of Australia has ordered Oztures Trading Pty Ltd, trading as Binance Australia Derivatives, to pay a 10 million Australian dollar ($6.9 million) penalty after the company admitted to misclassifying more than 85% of its Australian client base and exposing retail investors to high-risk crypto derivatives without required protections.

The Australian Securities and Investments Commission (ASIC) said the affected group included 524 retail investors who were wrongly treated as wholesale clients between July 2022 and April 2023. Those clients later incurred $6.3 million in trading losses and paid $2.6 million in fees.

Binance also admitted in a statement of agreed facts to multiple compliance failures, including not providing product disclosure statements to retail clients, not making a target market determination and not maintaining a compliant internal dispute resolution system.

The new penalty comes on top of the around $9 million in compensation that Binance’s local derivatives unit paid to affected clients in November 2023.

A spokesperson for Binance told Cointelegraph that the “issue was self-identified, reported to ASIC, and fully remediated in 2023,” with the $9 million paid to affected users in November 2023.

*Court order against Binance Australia Derivatives. Source:* *The Federal Court of Australia*

Binance Australia Derivatives’ license was cancelled by the country’s securities regulator in April 2023, following a review of the company’s operations in Australia, including its classification of retail and wholesale clients.

Binance admits to client onboarding failures

Binance admitted to poor staff training and client onboarding failures in the statement of agreed facts, including allowing sophisticated investors to make unlimited attempts at a multiple-choice quiz until they achieve a passing score for Binance to award them the sophisticated investor status.

Of the 524 users, 460 were incorrectly classified as sophisticated investors and 33 as meeting the individual wealth test.

*Investor misclassification breakdown at Binance Derivatives Australia. Source: Asic.gov.au*

It also admitted to failing to provide a product disclosure statement to retail clients, not maintaining a compliant internal dispute resolution system, failing to comply with Australian Financial Services licence conditions and inadequately training employees.

ASIC said Binance’s senior compliance staff provided “inadequate oversight” of client applications, further weakening the onboarding and classification process.

“Binance’s shortcomings left more than 85% of their Australian customer base exposed to high-risk products they should have never been able to access,” said ASIC Chair Joe Longo, adding that this is a “clear warning to global financial services entities looking to set up shop in Australia.”

The ruling also follows a separate August 2025 action by the Australian Transaction Reports and Analysis Centre against Investbybit Pty Ltd, another Binance-linked Australian entity, ordering it to appoint an external auditor over Anti-Money Laundering and Counter-Terrorist Financing concerns.

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