ASIC Sues Over Misclassified Australian Clients
The Australian Securities and Investments Commission (ASIC) has filed a lawsuit against Binance Australia Derivatives, accusing the platform of failing to protect consumers.
The regulator claimed that between July 2022 and April 2023, Binance misclassified more than 500 retail customers as wholesale investors. Binance reportedly refused to provide them with key protections under Australian financial laws.
Binance files another lawsuit over regulatory violations
according to ASICretail customers are entitled to greater safeguards, including product disclosure statements (PDS), target market determination (TMD) and internal dispute resolution mechanisms.
Vice Chairman Sarah Court criticized Binance’s compliance practices, calling them “woefully inadequate.” She said many customers had suffered significant financial losses due to a lack of appropriate protection.
Sarah Court said: “ASIC will continue to use the full range of regulatory and enforcement tools to protect consumers and maintain market integrity in the digital asset sector.”
The lawsuit accuses Binance of multiple violations, including Binance’s failure to publish mandatory PDS and TMD documents, an inadequate dispute resolution system, and insufficient employee training. regulatory compliance.
Additionally, the regulator accused Binance of failing to conduct its business “efficiently, honestly and fairly.” The company will now seek penalties, declarations and adverse publicity orders through the lawsuit.
In April 2023, Binance’s Australian financial services license was canceled following a review of its operations. ASIC said the cancellation followed a request from Binance.
“There has been some misinformation (and confusion) about #Binance Australia. We called for the cancellation of the derivatives license yesterday. As of yesterday, the platform had exactly 104 users. Binance_AUS will continue to operate a spot exchange in Australia.” Former Binance CEO OfficialCZ wrote Time goes back to 2023.
This legal action highlights ASIC’s Regulating the crypto industry. Recently, regulatory agencies Kraken’s Australian operator fined $12.8 million Compliance violations.
Another Australian agency, AUSTRAC, has also Increased scrutiny of cryptocurrency ATMs. The agency will require operators to strictly implement KYC checkmonitor transactions and report cash withdrawals over $10,000.
Globally, Binance continues to face increasing legal challenges. The Indian government reportedly accused the platform of $85 million in taxes owed.
In Britain, a Former Binance employee files whistleblower lawsuitaccused a co-worker of soliciting bribes from clients to obtain preferential treatment. The whistleblower also claims to have been wrongfully fired after reporting misconduct.
Overall, the lawsuit against Binance Australia reflects the growing regulatory pressure faced by cryptocurrency platforms as governments step up efforts to enforce compliance with financial laws.
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