$17.4m in compensation paid to retail investors by OTC derivative issuers
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The news: ASIC says crypto exchange Binance Australia was among eight OTC derivatives issuers forced to compensate retail investors who lost money trading high-leverage derivatives instruments.
The numbers: Oztures Trading Pty Ltd, trading as Binance Australia Derivatives has paid roughly $13.1 million to 523 retail clients incorrectly classified as wholesale or "sophisticated" investors, a requirement to access high-leverage derivatives products. Additionally, CMC Markets, Pepperstone, IG, Eightcap, Saxo, Capital Com and City Index paid or agreed to pay a combined $4.3 million for issuing contracts for difference (CFDs) with leverage ratios outside legal limits.
The context: Binance Australia, the local outpost for China-based crypto exchange Binance, voluntarily cancelled its financial services license in April 2023, following an ASIC investigation into the exchange's misclassification of investors.
The source: ASIC Media Release
