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ASIC Sues Binance for Misclassifying Retail Clients
The Australian Securities and Investments Commission (ASIC) has taken legal action against Binance Australia Derivatives, alleging that the crypto derivatives platform misclassified over 500 retail clients as wholesale investors. This alleged classification occurred between July 2022 and April 2023.
According to ASIC, this misclassification deprived the affected clients of essential legal protections under Australian financial laws. The regulator claims that Binance failed to provide necessary disclosures, dispute mechanisms, and compliance measures.
The lawsuit highlights multiple regulatory breaches by Binance, including failure to issue necessary Product Disclosure Statements (PDS) or Terms & Conditions Documents (TMD). Furthermore, ASIC accuses Binance of providing inadequate internal dispute resolution processes and insufficient employee training to maintain compliance with its financial services license.
In a separate matter, Binance is facing intellectual property theft allegations in the United States. The creator of Peanut the Squirrel has accused the exchange of trademark infringement regarding its PNUT-themed memecoin.
This development comes as ASIC increases its scrutiny of the crypto industry. Recently, the regulator fined Kraken’s Australian operator $12.8 million for regulatory breaches.
Source: cryptonewsland.com
