On 27 March 2026, the Federal Court of Australia ordered Oztures Trading Pty Ltd, trading as Binance Australia Derivatives, to pay a pecuniary penalty of AUD 10 million vide order dated 27 March 2026 delivered by Justice Moshinsky. The order followed admitted contraventions of the Australian Corporations Act 2001 (Cth). Binance Australia Derivatives misclassified 524 retail clients as wholesale clients over nine months. This exposed retail investors to high risk crypto derivative products without statutory consumer protections. The misclassification resulted in over AUD 12 million in combined trading losses and fees. Justice Moshinsky of the Federal Court delivered the penalty in proceedings brought by the Australian Securities and Investments Commission (ASIC). The case number is VID1381/2024 in the Victoria Registry. Binance admitted to all contraventions alleged by ASIC. The penalty adds to approximately AUD 13.1 million in compensation already paid to affected clients.
The Enforcement Action and Court Proceedings
ASIC initiated civil proceedings against Oztures Trading Pty Ltd in December 2024. The proceedings were filed in the Federal Court of Australia, Victoria Registry, under case number VID1381/2024. Binance admitted to all contraventions alleged by ASIC in a Statement of Agreed Facts filed on 31 July 2025, prepared for the purposes of section 191 of the Evidence Act 1995 (Cth).
The Statement of Agreed Facts recorded that Binance contravened sections 912A(1)(a), 912A(1)(b), 912A(1)(f), 912A(1)(g), 994B(1) and 1012B(3) of the Corporations Act 2001 (Cth) during the period 7 July 2022 to 21 April 2023 (the Offer Period).
Justice Moshinsky ordered Binance to pay a pecuniary penalty of AUD 10 million. Binance was also ordered to contribute to ASIC’s costs.
Corporate Structure of Binance Australia Derivatives
Oztures Trading Pty Ltd (ACN 142 898 324) traded as Binance Australia Derivatives. The entity is part of the global Binance Group, described as the operator of the world’s largest digital crypto exchange by trading volume.
Investbybit Pty Ltd (ACN 621 652 579), trading as Binance Australia, served as a corporate authorised representative of Oztures from 29 June 2022 to 6 April 2023. A joint venture agreement between the two entities provided for Investbybit to deliver referral services, registration of new customers and collection of Know Your Customer and Know Your Business documentation.
The parent company structure changed during the relevant period. Binance Capital Management Co. Ltd, based in the British Virgin Islands, was the parent of Oztures from at least 30 June 2022 to 8 September 2022. Binance Holdings (AP) Limited, an Ireland based company, became the parent of Oztures from at least 8 September 2022 onward. Binance Holdings also holds 46% of the shares in Investbybit.
The Scope of Client Misclassification
During the Offer Period, 611 persons held or opened an account with Oztures. Of these, 524 clients did not provide sufficient information for Oztures to confirm they were not retail clients under section 761G of the Corporations Act. These 524 individuals were therefore retail clients within the meaning of section 761G(1).
The breakdown of misclassified clients across wholesale investor categories was as follows:
460 were incorrectly classified as meeting the Sophisticated Investor Test. 33 were incorrectly classified as meeting the Individual Wealth Test. 26 did not provide sufficient evidence and were incorrectly classified as meeting the Professional Investor Test. 4 did not provide sufficient evidence and were incorrectly classified as meeting the Related Body Corporate Test. 1 did not provide sufficient evidence and was incorrectly classified as meeting the Large Business Test.
This means over 85% of the total Australian client base was misclassified during the Offer Period.
Products Offered Without Consumer Protections
During the Offer Period, Oztures offered three categories of derivative products. Futures UM (USD M Futures) were perpetual or delivery contracts for difference quoted and settled in USDT or BUSD stablecoins. Futures CM (Coin M Futures), available from 18 August 2022, were contracts settled in cryptocurrency other than stablecoins. Options, available from 30 December 2022, were cryptocurrency options contracts quoted and settled in USDT.
Because the 524 retail clients were misclassified, Oztures did not provide a Product Disclosure Statement to any of them. No Target Market Determination was made for any of the products prior to their issue. The entity also did not maintain a compliant internal dispute resolution system as required for retail clients.
Onboarding Failures and Compliance Deficiencies
The Statement of Agreed Facts detailed the onboarding procedures used by Oztures and their failures.
Prospective clients seeking classification as Sophisticated Investors were required to complete a knowledge test. This was a multiple choice test with 10 questions. Clients were permitted unlimited attempts. The same questions were asked each time. No written statement was provided to any of the 460 clients in the Sophisticated Investor category, as required by section 761GA(e) of the Corporations Act.
For the Individual Wealth category, no client provided a certificate from a qualified accountant within the preceding six months, as required by section 761G(7)(c) of the Corporations Act.
For the Professional Investor category, certain clients passed the assessment by certifying they were an exempt public authority or instrument of the Crown, despite being natural persons.
The compliance team’s manual review process failed to identify that the supporting documentation submitted by clients was insufficient. There was no monitoring by more senior compliance staff of the manual reviews conducted before or after clients were onboarded.
The only policy document relevant to the Wholesale Assessment was the “Binance Australia Derivatives Wholesale Clients Policy.” No records existed as to how this policy was used, who received it or what training was provided on it.
Financial Harm to Retail Clients
The total financial harm to the 524 misclassified clients was estimated at AUD 12,558,271.29 (converted from USD at 30 July 2025 rates). This comprised AUD 8,665,985.39 in trading losses and AUD 3,892,285.90 in fees paid to Oztures.
The Sophisticated Investor category accounted for the largest group of 460 clients, with total harm of AUD 3,951,949.84. The Individual Wealth category of 33 clients suffered AUD 5,330,128.72 in total harm. The Professional Investor category of 26 clients incurred AUD 3,275,858.53.
ASIC’s Regulatory Timeline
ASIC commenced a targeted review of Binance’s financial services business in December 2022. This included examination of its classification of wholesale clients. On 13 December 2022, ASIC issued statutory notices to Oztures.
On 24 February 2023, Oztures notified ASIC of a reportable situation relating to the misclassification. On 2 March 2023, the entity reported that 506 clients had been affected and estimated total financial loss at AUD 7,000,000.
On 29 March 2023, ASIC issued a notice of hearing under section 915C of the Corporations Act to consider cancellation or suspension of the AFS licence (numbered 425165). On 5 April 2023, Oztures voluntarily applied to cancel its AFS licence. The cancellation took effect on 6 April 2023.
Compensation and Remediation
After becoming aware of the misclassification, Oztures commenced offboarding retail clients in February 2023. By 25 February 2023, all affected customers were suspended from the platform.
Oztures paid approximately AUD 13.1 million in full compensation to retail clients for aggregated losses and fees, including interest. The remediation programme was overseen by ASIC and was consistent with Regulatory Guide RG277 on Consumer Remediation. The methodology was designed to place affected clients in the same position as if they had never been onboarded. The remediation programme was independently reviewed by KordaMentha.
In May and June 2023, Binance paid approximately AUD 7.8 million to 417 clients. In September 2023, a further AUD 5.2 million was paid to an additional 18 clients.
ASIC Chair Statement on Regulatory Expectations
ASIC Chair Joe Longo stated: “Binance failed to set up basic compliance checks and incorrectly approved hundreds of applications for complex, wholesale investor products.Binance’s shortcomings left more than 85% of their Australian customer base exposed to high-risk products they should have never been able to access, and without important consumer protections or rights, costing retail investors millions. This wasn’t just a technical breach it directly resulted in over $12 million in client losses.”
Mr Longo stated: “This is a clear warning to global financial services entities looking to set up shop in Australia. All financial services companies must follow the law from day one, and have proper client onboarding systems and processes in place. This includes financial services that relate to crypto and digital assets.”
Admitted Contraventions Under the Corporations Act 2001
Binance admitted that during the Offer Period it failed to comply with the following obligations: providing a Product Disclosure Statement to retail clients; making a Target Market Determination; maintaining a compliant internal dispute resolution system; ensuring financial services were provided efficiently, honestly and fairly; complying with AFS licence conditions; and adequately training and ensuring competency of employees.
ASIC’s Prior Communication on Wholesale Client Classification
On 23 March 2021, ASIC sent a letter to various industry participants regarding the misclassification of retail clients as wholesale clients. The letter asked industry participants to ensure their classification and onboarding procedures accorded with the law. On 12 June 2021, this letter was sent to Mr Michael Sawyer, who served as a Responsible Manager for Oztures from around July 2022 to 5 April 2023.
Financial Position of Oztures Trading Pty Ltd
The financial position of Oztures for FY22 showed net assets of AUD 861,498 and a pre tax loss of AUD 203,164. For FY23, net assets rose to AUD 5,113,770, revenue was AUD 5,918,021, and the pre tax loss was AUD 5,031,271. The FY23 loss figure included AUD 9,320,500 paid in customer compensation and related legal fees.
For the calendar year 2024, Oztures reported net assets of AUD 718,204.05 and a net loss of AUD 521,881.03.
By contrast, Investbybit (Binance Australia) reported net assets of AUD 206,633,683.92 and net profit of AUD 10,524,673.63 for the same period.
Broader Regulatory Context for Crypto Derivatives in Australia
ASIC has previously taken civil penalty proceedings against Bit Trade Pty Ltd, the operator of the Kraken crypto exchange in Australia, for design and distribution obligation failures. The Federal Court ruled in favour of ASIC’s case in that matter.
ASIC Information Sheet 225 (INFO 225) provides guidance on when a digital asset related offering may constitute a financial product under the Corporations Act. INFO 225 outlines that entities offering products and services related to digital assets must assess all rights and benefits attached to the digital asset and any associated arrangements to determine whether Australian financial services laws apply.
ASIC has stated it will continue to use its full range of regulatory and enforcement tools, including guidance, licensing, compliance and enforcement action, to protect consumers and uphold market integrity in the digital asset sector.
Cooperation and Prior Conduct
The Statement of Agreed Facts recorded that Oztures had not previously been found by a Court to have engaged in a breach of the Corporations Act. Oztures cooperated during ASIC’s investigation, admitted the majority of alleged contraventions and cooperated in full during the proceedings.
