In the latest development from the coin market, according to sources from Reuters, the Australian Securities and Investments Commission (ASIC) has sued the derivatives business branch of the coin exchange Binance in Australia. The lawsuit arises from retail customers not receiving the necessary protection after being incorrectly classified as wholesale customers.
According to ASIC, from July 2022 to April 2023, this agency provided crypto derivative products to 505 retail investors, accounting for approximately 83% of customers in the domestic market, but they were incorrectly classified as wholesale customers. This left their rights and protections inadequately ensured.
Notably, in April 2023, ASIC revoked the financial services license of Binance Australia Derivatives after conducting a 'targeted review' of this exchange. Subsequently, in November 2023, the regulator oversaw compensation of approximately 13.1 million Australian dollars (equivalent to 8.29 million US dollars) to 435 retail customers.
ASIC Deputy Chair, Ms. Sarah Court, asserted that crypto derivatives products are inherently high-risk and complex, thus ensuring the correct classification of customers is essential to safeguard their necessary rights.
Furthermore, this regulator is also seeking penalties, disclosures, and public orders opposing Binance. So far, Binance has not provided an official response to this issue.
This is not the first time the altcoin market has encountered trouble in Australia. Earlier this month, the Federal Court of Australia also fined the operating branch of the crypto exchange Kraken with a penalty of 8 million Australian dollars after ASIC filed a civil lawsuit.
This incident further underscores the importance of implementing clear and transparent regulations in the coin and altcoin sector. Stay tuned for the latest updates on global financial news with CoinStation.
(Source: Reuters)
