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Author: Admin | 2025-04-28
Binance (@binance) February 23, 2023ASIC Deputy Chair Sarah Court described Binance’s compliance systems as “woefully inadequate,” noting how the misclassification exposed clients to high-risk speculative products without appropriate safeguards."Crypto derivative products are inherently risky and complex, so it is critical that retail clients are classified correctly,” said Court. “Those classifications ensure they receive the required consumer protections, and the information required to make an informed investment decision.”In response to these breaches, ASIC is seeking penalties, declarations, and adverse publicity orders.Last April, the ASIC canceled the operating license for Binance Australia Derivatives, after a "targeted review" of Binance that began in February.The review was triggered after Binance publicly admitted to a client misclassification error on Twitter, writing “As per Australian regulation, we were required to inform these users and close any of their own derivative positions with immediate effect.”“It has not yet reported these matters to ASIC in accordance with its obligations under its Australian Financial Services Licence," an ASIC spokesperson later told Decrypt.In July 2023, the Australian regulator reportedly conducted searches at the exchange's local offices as part of its investigation into the now-defunct local derivatives business of the exchange.This lawsuit comes amid ASIC’s increasing scrutiny of the crypto sector. Last week, the agency fined Kraken's local operator $5.1 million for illegally offering margin trading to retail customers.As part of its regulatory initiatives, ASIC introduced the INFO-225 consultation paper this month. Public feedback will be gathered through February 2025, with updated guidance scheduled for release later in the year.Edited by
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