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ASIC Sues Binance Australia for Misclassifying Retail Investors
The Australian Securities and Investments Commission (ASIC) has taken a severe step by suing Binance Australia Derivatives, accusing the exchange of misclassifying over 500 retail investors as wholesale clients. This move is a significant blow to the crypto exchange giant, which has been facing numerous legal issues globally.
As per the allegations, between July 2022 and April 2023, Binance Australia allowed retail investors to trade risky crypto derivative products without providing them with essential consumer protections like proper disclosure statements and access to dispute resolution schemes. This misclassification affected a whopping 83% of Binance’s Australian clients.
ASIC has claimed that Binance did not operate fairly and abide by the laws. The regulator further stated that the exchange’s compliance systems were inadequate and non-transparent, resulting in many clients reportedly suffering financial losses.
This is not the first instance where Binance has faced legal issues. In the past, Binance has been accused of various violations, including illegal money laundering cases to fund terrorist groups in Hamas. Additionally, there have been instances of intellectual property theft cases against the exchange.
In related news, ASIC has previously fined another major crypto platform, Kraken, for offering illegal margin trading products in Australia, resulting in local traders losing over $8 million. This recent development serves as a stark reminder to investors about the importance of proper protection and the risks involved in trading crypto derivatives.
As the global crypto market is witnessing an unprecedented bull run with Bitcoin soaring past $107K, it remains to be seen whether Binance will be able to overcome this regulatory hurdle or face severe consequences.
Source: coinpedia.org
