The Australian Securities and Investments Commission (ASIC) has taken legal action against Binance Australia Derivatives for allegedly failing to comply with consumer protection requirements.
In a press release on December 18, the regulator stated that Binance had mislabeled more than 500 retail customers as wholesale investors between July 2022 and April 2023, which removed their legal protections under Australia's financial laws.
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According to ASIC, retail customers are entitled to stronger consumer safeguards, such as access to a Product Disclosure Statement (PDS), Target Market Determination (TMD) and internal dispute resolution processes.
The complaint outlines multiple regulatory failures, including Binance's failure to issue a PDS or TMD, inadequate dispute resolution processes and lack of employee training to ensure compliance with its financial services license.
ASIC also alleges Binance failed to provide services in an efficient, honest and fair manner.