"The court found that more than 85% of affected clients were incorrectly labeled as wholesale investors, exposing them to complex and high-risk crypto products without proper safeguards."
"The misclassified group recorded trading losses of about $6 million and paid roughly $2.69 million in fees during the period from July 2022 to April 2023."
"Binance acknowledged the failures in a statement of agreed facts with ASIC, stating that the issue had been identified internally and resolved in 2023."
"ASIC emphasized that the enforcement action sends a clear signal about the need for strong compliance systems in the crypto sector."
A federal court ordered Binance's Australian derivatives arm to pay $6.9 million due to serious failures in customer classification. The Australian Securities and Investments Commission (ASIC) filed a lawsuit in 2024, alleging that Binance misclassified over 85% of its users as wholesale investors, allowing 524 retail users access to high-risk crypto derivatives. The misclassification led to significant trading losses and fees for affected clients. Binance acknowledged the flaws in its onboarding process and stated the issue was resolved in 2023. The penalty follows a previous compensation payment of $9 million to users.
Read at news.bitcoin.com
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