{"id":568205,"date":"2026-03-27T17:17:11","date_gmt":"2026-03-27T17:17:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/568205\/"},"modified":"2026-03-27T17:17:11","modified_gmt":"2026-03-27T17:17:11","slug":"binance-australia-hit-with-6-9m-fine-after-investors-lose-millions-on-derivatives","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/568205\/","title":{"rendered":"Binance Australia Hit With $6.9M Fine After Investors Lose Millions on Derivatives"},"content":{"rendered":"

In brief
\nA federal court ordered Binance Australia Derivatives to pay a $6.9 million USD penalty for allowing misclassified users to access high-risk products.
\nA total of 524 retail investors were incorrectly classified as wholesale clients between July 2022 and April 2023, resulting in about $6 million in trading losses
\nBinance admitted allowing clients unlimited attempts at a multiple-choice quiz to qualify as sophisticated investors.<\/p>\n

Australia’s Federal Court has ordered Oztures Trading Pty Ltd, trading as Binance Australia Derivatives, to pay an AUD $10 million (about $6.9 million USD) penalty after the exchange admitted to exposing 524 retail investors to high-risk crypto derivative products without required consumer protections.<\/p>\n

The misclassification occurred between July 2022 and April 2023, with Binance admitting to failures in client onboarding that allowed retail clients to make unlimited attempts at a multiple-choice quiz until they achieved a passing score to qualify as sophisticated investors, according to ASIC’s announcement<\/a>.<\/p>\n

The misclassified client group incurred AUD $8.66 million (about $6 million) in trading losses and paid AUD $3.89 million ($2.67 million) in fees. Of the 524 misclassified clients, 460 were incorrectly classified as meeting the Sophisticated Investor Test, 33 as meeting the Individual Wealth Test, 26 as professional investors, 4 as Related Body Corporate, and 1 as meeting the Large Business Test.<\/p>\n

In one example, Binance assessed an individual as a professional investor based solely on their claim to be an “exempt public authority,” without adequate verification.<\/p>\n

\ufeff<\/p>\n

Decrypt reached out to Binance for comment but did not immediately receive a response.<\/p>\n

\u201cBinance failed to set up basic compliance checks and incorrectly approved hundreds of applications for complex, wholesale investor products,\u201d ASIC Chair Joe Longo said, in a statement. \u201cBinance\u2019s shortcomings left more than 85% of their Australian customer base exposed to high-risk products they should have never been able to access, and without important consumer protections or rights, costing retail investors millions.\u201d<\/p>\n

Justice Moshinsky also ordered Binance to contribute to ASIC’s costs, with the penalty coming on top of approximately AUD $13.1 million<\/a> in compensation already paid to affected clients in 2023.<\/p>\n

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