The Federal Court ordered Binance’s Australian unit to pay $10 million for misclassifying 524 retail investors as wholesale clients, exposing them to high-risk cryptocurrency derivatives without the required protections. The penalty followed a late-2024 lawsuit by the Australian Securities and Investments Commission alleging the misclassification led to about $8.7 million in trading losses and $3.9 million in fees for the affected clients.
Binance Australia Derivatives admitted the failures in a statement of agreed facts with ASIC. The court found that between July 2022 and April 2023 onboarding and staff training lapses allowed a test-based qualification to be gamed, enabling some users to access sophisticated investor status. In one instance, a client was deemed a professional investor solely on self-certification as an exempt public authority without proper verification.
The ASIC noted the penalty adds to about $13.1 million in compensation already paid to affected clients in 2023. Binance Australia said the issue was self-identified, reported to ASIC, and fully remediated in 2023.
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