Australia’s Federal Court has ordered Binance Australia Derivatives-operating as Oztures Trading Pty Ltd-to pay a $6.9 million USD penalty for misclassifying retail investors as wholesale clients.
Between July 2022 and April 2023, 524 retail users gained access to high-risk crypto derivatives after bypassing investor status verification through unlimited attempts on a multiple-choice quiz. The group suffered $6 million in trading losses and paid $2.67 million in fees.
Regulator ASIC found Binance approved classifications without adequate verification-such as labeling someone a “professional investor” based solely on an unverified self-declaration.
ASIC Chair Joe Longo stated the exchange’s failures left over 85% of its Australian user base exposed to complex products without required consumer safeguards.
The penalty follows $13.1 million in prior compensation paid by Binance to affected clients in 2023. The court also ordered Binance to cover part of ASIC’s legal costs.