Binance is currently facing a lawsuit in Australia for mislabeling retail clients and risky investments

The Australian Securities and Investments Commission (ASIC) has initiated legal proceedings against Binance Australia Derivatives, alleging that the crypto trading platform does not adhere to consumer protections.

Binance was accused by the regulator of providing crypto derivative products to 505 retail investors in Australia between July 2022 and April 2023, falsely classifying them as wholesale clients, according to a media release issued on December 18.

According to the lawsuit, Binance’s retail customers were not given the consumer protections that are usually given to smaller investors because of the misclassification. For example, they were not given access to Product Disclosure Statements (PDS), a Target Market Determination (TMD), or internal dispute resolution procedures.

Binance’s Australian derivatives exchange offers futures contracts for Bitcoin, Ether, and BNB, the latter of which is the company’s proprietary cryptocurrency, as per ASIC’s legal filing.

ASIC revoked Binance’s Australian financial services license in April 2023 after conducting an analysis of its operations in response to a request for cancellation submitted by the company.

In an effort to enhance supervision of the expanding digital asset market in Australia, the regulatory body has recently escalated its enforcement of the cryptocurrency industry.

ASIC issued a sanction of AUD 5.1 million (approximately USD 3.2 million) to BitTrade earlier this week, as per the Australian Federal Court. BitTrade was discovered to have offered a margin lending product to customers without obtaining the requisite regulatory sanction, which resulted in the fine.

Concurrently, Mark Longo, the proprietor of the common internet phenomenon Peanut the Squirrel, initiated legal proceedings against Binance. He alleged that the crypto exchange had failed to obtain the requisite permissions to use the “PNUT” trademark and a popular image of Peanut on its platform.

Michaela does not possess any crypto assets and does not hold any crypto positions. Informational purposes only; this article should not be considered financial advice. The Shiba Inu cryptocurrency project’s official media and publications are The Shib Magazine and The Shib Daily.

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