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    ASIC sues Binance Australia over customer misclassification and rule violations

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    The Australian Securities and Investments Commission (ASIC) is suing Binance Australia Derivatives for misclassifying regular customers as major investors, thus reducing their legal protection. ASIC claims Binance violated several rules, including lack of necessary customer documentation, inadequate dispute resolution, and insufficient employee training. This lawsuit follows the April 2023 cancelation of Binance’s Australian financial services license. Separately, Binance faces allegations of intellectual property theft in the US related to its PNUT-themed memecoin.

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    The Australian Securities and Investments Commission (ASIC) is taking Binance Australia Derivatives to court. They’re a platform for trading crypto derivatives and are accused of not doing a good job at protecting their customers.

    The watchdog said that Binance wrongly classified over 500 regular customers as big-time investors between July 2022 and April 2023. This gave them less legal protection than they should have had according to Aussie financial laws.

    In the lawsuit, ASIC argues that regular customers are meant to have better safeguards, like access to certain documents and easier ways to resolve disputes. ASIC Deputy Chair, Sarah Court, criticized Binance’s way of managing legal compliance as more than lacking. She said that it led to hefty financial losses for many clients.

    The lawsuit lists various ways Binance broke the rules, like failing to give out necessary documents, not having a proper dispute resolution system, and lacking training for employees to make sure they follow all necessary financial rules. ASIC even said that Binance didn’t manage to provide services “efficiently, honestly, and fairly.”

    After looking into the operations of the crypto exchange in April 2023, ASIC cancelled Binance’s Australian financial services license at the request of Binance themselves.

    This court case shows ASIC’s rising interest in the crypto industry. Recently, they fined Kraken’s Australian operator a whopping $12.8 million for rule-breaking. ASIC is also working on new rules that would force crypto exchanges to have financial services licenses under the Corporations Act.

    In other news, Binance has allegations of intellectual property theft hanging over their heads in the United States. Peanut the Squirrel’s owner, Mark Longo, has sent a cease-and-desist letter to Binance, claiming it of trademark infringement because of its PNUT-themed memecoin.

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