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ASIC Sues Binance Australia for Misclassifying Retail Investors
The Australian Securities and Investments Commission (ASIC) has taken a drastic step against Binance Australia Derivatives by filing a lawsuit accusing the exchange of failing to protect its users. The charges are based on allegations that Binance misclassified over 500 retail investors as wholesale clients, thus denying them essential consumer protections under Australian law.
According to reports, between July 2022 and April 2023, Binance Australia allowed retail investors to trade risky crypto derivative products without proper disclosure or access to dispute resolution schemes. This alleged misclassification affected a staggering 83% of the exchange’s Australian clientele.
ASIC has accused Binance of not operating fairly and failing to abide by the laws governing financial services in the country. The regulator has expressed concerns over Binance’s inadequate compliance systems, which it claims were not transparent or effective.
The implications of this lawsuit could be severe for Binance Australia, as ASIC can potentially revoke its financial services license if found guilty. This would effectively shut down its operations in the region.
Source: coinpedia.org
