Australian court fines Binance Australia derivatives unit about 10 billion won

Uk Jin

Summary

The Federal Court of Australia said it imposed a fine of about 10 billion won on Binance Australia’s derivatives entity.
ASIC said Binance Australia’s derivatives entity wrongly exposed retail investors—misclassified as wholesale clients—to high-risk crypto-asset derivatives.
Affected investors incurred losses of A$12 million, and ASIC said the penalty, separate from earlier compensation, is an important warning to financial services providers.

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An Australian court has imposed a fine of about 10 billion won on Binance Australia’s derivatives entity for allegedly breaching investor-protection obligations.

According to The Wall Street Journal on the 27th (Korea time), the Australian Securities and Investments Commission (ASIC) said in a statement that the Federal Court of Australia imposed a civil penalty of A$10 million (about 10 billion won) on Binance Australia’s derivatives entity.

ASIC said the Binance Australia derivatives entity misclassified about 524 retail investors as “wholesale clients” from July 2022 to April 2023, exposing them to high-risk crypto-asset derivatives.

Those investors were estimated to have suffered total losses of more than A$12 million (about 11 billion won) from derivatives trading.

Binance previously paid about A$13.1 million in compensation to affected investors, but the fine is an additional measure on top of that.

ASIC Chair Joe Longo said, “Binance’s inadequate client classification exposed many retail investors to high-risk products they should not have been able to access,” adding that “this is an important warning to financial services providers.”