Australian Securities and Investments Commission v Oztures Trading Pty Ltd trading as Binance Australia Derivatives [2026] FCA 509

Oztures Trading Pty Ltd traded as Binance Australia Derivatives. It held an Australian Financial Services Licence and offered cryptocurrency derivative products to Australian customers. The products included USD-M Futures, Coin-M Futures and Options. The business made a key commercial decision in or around April 2022: it would limit derivatives trading to customers it considered to be wholesale clients or sophisticated investors.

That decision mattered because the Corporations Act treats retail clients differently. If a business is offering or issuing products to retail clients, extra protections can apply, including Product Disclosure Statements, target market determinations and a compliant internal dispute resolution system. Oztures did not put those retail-client protections in place for the products because it had built its model around the assumption that only non-retail clients would be onboarded.

The case shows what happens when that assumption is wrong. The Court accepted that during the offer period, 524 of Oztures' 611 clients had not provided sufficient information for Oztures to confirm that they were not retail clients. During the issue period, 437 of those clients were issued one or more products. So the problem was not a handful of edge cases. It was a broad failure in the way the business classified customers and then relied on that classification to avoid retail obligations.

ASIC issued statutory notices in December 2022. While responding, Oztures identified a breach or likely breach arising from the misclassification issue. It reported the matter to ASIC, began offboarding affected customers in February 2023, suspended all affected customers by 25 February 2023, voluntarily applied to cancel its AFSL on 5 April 2023, and the cancellation took effect on 6 April 2023. Oztures later paid approximately $13.1 million in compensation for losses and fees, including interest, and it is no longer trading.

Even with those steps, ASIC still brought proceedings and the Court still imposed a substantial penalty. That is important for business readers. Cooperation, remediation and closure can reduce risk, but they do not erase the seriousness of widespread compliance failures, especially where the failures affected customer protections built into the legislation.

Oztures used a structured onboarding process. A prospective client first opened an account with Investbybit Pty Ltd trading as Binance Australia, then undertook a wholesale assessment to determine whether financial products would be provided to them as a retail client, wholesale client or sophisticated investor. The customer was shown warnings about the risks of over-the-counter derivatives and the Oztures products, and had to acknowledge that they would not be able to receive services unless they met the definition of wholesale client under the Corporations Act.

The customer then selected one of five categories: high net worth individual or controlled entity, professional investor, large business, sophisticated investor, or related body corporate. They ticked a box certifying that they met the criteria. Sophisticated investor applicants also completed a knowledge test. The pass mark was at least 80%, but the applicant could attempt the test an unlimited number of times and the same questions were asked each time. The customer then signed an acknowledgment that the information provided was true and that the products would be provided to them as a wholesale client. Supporting documents were uploaded and manually checked by a member of Oztures' compliance team. If approved after manual review, the client could open a derivatives trading account and start trading.

On paper, that process may sound careful. The Court's findings show why process design and legal sufficiency are different things. The Court accepted that none of the clients in several categories had provided enough information to satisfy the relevant statutory tests. None of the related body corporate applicants provided enough information to satisfy the relevant test. None of the large business applicants provided enough information to satisfy the large business test. None of the high net worth individual applicants provided a valid accountant's certificate within the preceding six months. None of the professional investor applicants provided sufficient evidence to meet the relevant criteria. And for the 460 clients who sought to be classified as sophisticated investors, none were given the written statement of reasons required by the legislation, and Oztures did not determine whether they otherwise satisfied the statutory requirements.

The Court also recorded more practical failures in operation. Some sophisticated investor applicants were approved even though the knowledge test did not adequately test whether the person had the experience needed to assess the matters required by the Act. Some had not provided any or adequate evidence of trading experience. Some listed previous employers that did not appear connected to derivatives trading. Clients in other categories were approved despite invalid accountant's certificates, inadequate evidence or incorrect self-certification.

That matters because the legal problem was not just that some documents were missing. The process itself allowed legally insufficient applications to pass through. The Court later declared that Oztures failed to have adequate systems and processes in place to ensure that errors in classifying clients as wholesale or sophisticated did not occur where those errors were widespread, significant, repeated or systematic, or otherwise to prevent such errors from occurring.

This was not a conventional trial where the parties fought over what happened. Oztures admitted the contraventions. The Court's task was to decide whether it should make the proposed declarations and whether the jointly proposed penalty and costs orders were appropriate. That still required the Court to understand the conduct in enough detail to assess seriousness and deterrence.

The judgment is especially useful on that point. At the hearing, the judge raised a concern that the statement of agreed facts did not contain a sufficiently detailed explanation of how the contraventions came about. The judge said that explanation was necessary to determine whether the proposed penalty was sufficient to achieve general and specific deterrence. The parties were given leave to file further material. Oztures then filed an affidavit from a compliance officer within the Binance group. After considering that additional material, the Court was satisfied that it was appropriate to make the proposed declarations and orders.

For business readers, this is significant. Even where a regulator and a company agree on the outcome, the Court does not simply rubber-stamp it. The Court wants to understand the mechanism of the failure. Was it a one-off mistake, a training gap, a policy gap, a systems design problem, or a repeated operational weakness? Here, the Court's concern about deterrence meant it wanted a clearer account of how the onboarding failures actually happened before approving the agreed penalty.

The legal issues centred on several Corporations Act provisions. The Court declared contraventions of s 1012B(3)(a)(i) for failing to give a Product Disclosure Statement before offering products to retail clients during the period 7 July 2022 to 21 April 2023. It declared contraventions of s 1012B(3)(a)(iii) for failing to give a Product Disclosure Statement before issuing products to retail clients during the period 8 July 2022 to 21 April 2023 where there were reasonable grounds to believe the client had not already been given one. It declared contraventions of s 994B(1) and (2)(a) for failing to make target market determinations before issuing the products to retail clients during the issue period.

The Court also declared AFSL obligation breaches. Under s 912A(1)(a), Oztures failed to do all things necessary to ensure the financial services covered by its licence were provided efficiently, honestly and fairly, because it failed to have adequate systems and processes to prevent widespread, significant, repeated or systematic classification errors. Under s 912A(1)(b), it failed to comply with Condition 3 of its AFSL, which required it to establish and maintain compliance measures that ensured, as far as reasonably practicable, compliance with financial services laws. Under s 912A(1)(f), it failed to ensure employees were adequately trained and competent. Under s 912A(1)(g)(i), it failed to have a compliant internal dispute resolution system for retail clients.

The Court made declarations reflecting Oztures' admitted contraventions. The declarations are specific about both the conduct and the time periods. For the offer period from 7 July 2022 to 21 April 2023, Oztures contravened s 1012B(3)(a)(i) each time it failed to give a Product Disclosure Statement to any of the 524 clients who were not exempt from acquiring the products as retail clients before offering those products. For the issue period from 8 July 2022 to 21 April 2023, Oztures contravened s 1012B(3)(a)(iii) each time it failed to give a Product Disclosure Statement to a retail client before issuing a product where it had reasonable grounds to believe the client had not been given one.

During the issue period, the Court declared that Oztures contravened s 994B(1) and (2)(a) each time it failed to make a target market determination for each product before issuing the products to retail clients. It also declared that during the issue period Oztures contravened s 912A(1)(a) by failing to have adequate systems and processes in place to ensure that errors in classifying clients as wholesale or sophisticated did not occur where those errors were widespread, significant, repeated or systematic, or otherwise to prevent such errors. During the offer period, it contravened s 912A(1)(b) by failing to comply with Condition 3 of its AFSL. During the issue period, it contravened s 912A(1)(f) by failing to ensure employees were adequately trained and competent, and s 912A(1)(g)(i) by failing to have a compliant internal dispute resolution system.

The Court ordered Oztures to pay an aggregate pecuniary penalty of $10 million in respect of the contraventions of ss 912A, 994B and 1012B(3) covered by declarations 1 to 4 and 6 to 7. It also ordered Oztures to pay ASIC's costs fixed at $200,000. No pecuniary penalty was sought for the s 912A(1)(b) contravention because that subsection does not attract a pecuniary penalty.

The reasons also show that the Court's acceptance of the agreed outcome was not automatic. The judge wanted more detail about how the contraventions came about before deciding whether the proposed penalty was sufficient to achieve general and specific deterrence. After receiving further affidavit evidence, the Court was satisfied that the declarations and orders should be made. The orders were made on 27 March 2026 and the reasons were published on 24 April 2026.

For business owners, the practical reading is clear. A company can admit wrongdoing, cooperate, remediate customers, stop trading and still face a very substantial penalty if the Court considers deterrence requires it. The Court's focus was not only on the existence of policies or training, but on whether the business had systems that actually prevented legally significant errors from occurring at scale.

This case is about financial services, but the underlying lesson is broader. Many businesses build compliance around threshold classifications. A customer may be retail or wholesale. A worker may be an employee or contractor. A product may be regulated or unregulated. A transaction may trigger disclosure or not. Once the business answers that threshold question, the rest of the workflow follows. If the threshold answer is wrong, every later step can also be wrong.

Oztures is a good example. Once it decided a customer was wholesale or sophisticated, it treated that customer as outside the retail regime. That meant no Product Disclosure Statement, no target market determination and no compliant retail-client dispute resolution system. So the classification error did not stay confined to onboarding. It cascaded into disclosure, design and distribution, training, complaints handling and licence compliance.

The Court's declarations also show that regulators and courts look beyond written policies. Oztures had a wholesale clients policy introduced in June 2022. It had local compliance leads, support from a global compliance team, backend assessment staff, training delivered on 17 June 2022, and internal escalation channels. Yet the Court still accepted that the business failed to have adequate systems and processes and failed to ensure employees were adequately trained and competent. In other words, the existence of compliance artefacts did not answer the real question: did the system work lawfully in practice?

Another practical point is scale. The judgment notes that approximately 1,100 applicants applied to be onboarded as customers of Oztures and more than 500 applications were rejected. That shows the business was not simply approving everyone. But rejecting many applications did not save it, because the approved applications still included a large number of customers who had not lawfully been shown to be outside the retail regime. Businesses sometimes take comfort from having a gatekeeping process with a meaningful rejection rate. This case shows that a rejection rate is not proof of legal compliance.

Finally, the case is a reminder that remediation is important but not complete protection. Oztures compensated affected customers for losses and fees, including interest, and paid about $13.1 million under its remediation program. Those steps matter and courts do take post-breach conduct into account. But where failures are widespread and go to core statutory protections, a substantial penalty may still be imposed to deter similar conduct by others.

The relevant offer period was 7 July 2022 to 21 April 2023. The issue period was 8 July 2022 to 21 April 2023. ASIC issued statutory notices on 13 December 2022. Oztures notified a reportable situation on 24 February 2023 and lodged further breach reports on 2 March 2023, 20 March 2023 and 11 September 2023. Oztures applied to cancel its AFSL on 5 April 2023 and the cancellation took effect on 6 April 2023. The Court made orders on 27 March 2026 and published reasons on 24 April 2026.

The available reasons support a public explainer and are detailed enough to explain the commercial story, the statutory breaches, the periods involved, the Court's concern about deterrence, and the outcome. The published reasons available for this page are, however, truncated before the end of the judgment, so later passages may contain additional detail about penalty reasoning or the causes of the failures.