The Federal Court of Australia fined the local branch of Binance Platform, registered as “Oztures Trading Pty Ltd”, A$10 million (equivalent to US$6.9 million).

What did Binance do?

The Australian Securities and Investments Commission (ASIC) revealed that the Binance Australian derivatives platform incorrectly classified more than 500 investors as wholesale customers between July 2022 and April 2023, allowing them to be exposed to high-risk derivatives products that they should not have been exposed to, resulting in losses of more than AU$12 million.

The company acknowledged serious failures in its client onboarding process and poor employee training, as clients seeking the “sophisticated investor” designation were allowed to answer multiple questions repeatedly until they received a passing score.

Additionally, senior compliance officers failed to review and oversee customer requests, and one customer even described himself as an exempt public entity and was admitted to the platform as a professional investor without any documentation.

Compensation and penalties:

In addition to the fine, ASIC oversaw Binance paying A$13.1 million in compensation to those affected in 2023.

Joe Longo, the head of the agency, commented that what happened was not just a technical violation, but directly caused the loss of more than $12 million to individual investors who should have been protected by regulation.

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