Binance Australia fined $2m for millions of spam emails amid mass withdrawals

Home Economy Binance Australia fined $2m for millions of spam emails amid mass withdrawals
Binance Australia fined $2m for millions of spam emails amid mass withdrawals

The Australian arm of cryptocurrency exchange Binance has been slapped with a $2 million fine after it unleashed millions of emails that were difficult to unsubscribe from or sent without consumer’s consent.

It comes as jittery crypto investors have rushed to withdraw billions of dollars from Binance due to mounting fears over the platform’s financial health and reports of possible criminal charges.

An Australian Communications and Media Authority (ACMA) investigation revealed that Binance Australia had sent over 5.7 million commercial emails that either made it difficult for consumers to opt-out by requiring them to log into an account or didn’t contain a way to unsubscribe.

It also found the cryptocurrency exchange sent 25 emails without the consent of the recipients.

The emails, which were sent between October 2021 and May 2022, promoted Binance Australia’s cryptocurrency trading services and other crypto financial products.

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ACMA chair Nerida O’Loughlin said people have the right to unsubscribe from commercial messages without having to jump through hoops or make repeated requests or formal complaints.

“Customers should not be made to log-in to stop receiving messages,” she said.

“It is very concerning that we continue to see breaches of the spam laws from large size companies that should have good compliance practices in place. The Spam Act has been in force since 2003, so there are simply no excuses.

“It is also disappointing that the ACMA had contacted Binance Australia on several occasions leading up to the investigation to warn it that it may have had compliance problems and it failed to take adequate action.”

Binance Australia has entered a three-year court enforceable undertaking to commit it to an independent review of its e-marketing practices and implementation of improvements, ACMA said.

It’s the agency’s third major fine this year as part of an ongoing crackdown on spam. Previously, Latitude Financial was fined $1.5 million for sending more than three million unsolicited messages to its customers, while Sportsbet copped the biggest penalty with $3.7 million in fines.

Meanwhile, this week the world’s largest cryptocurrency exchange experienced the highest daily withdrawals since June, with net outflows of more than $US3 billion ($A4.4 billion) in the space of 24 hours, according to blockchain analytics firm Nansen.

But Binance founder Changpeng Zhao has insisted it is business as usual at the crypto exchange.

“We saw some withdrawals today,” he tweeted on Tuesday. “We have seen this before. Some days we have net withdrawals; some days we have net deposits. Business as usual for us.”

Binance also responded to concerns in a statement.

“We think that it’s important to note that yesterday’s market sell-off resulted in approximately $US1.14 billion ($A1.66 billion) being withdrawn from our platform in a 12-hour period, which was managed with ease,” it said.

”We passed this extreme stress test because we run a very simple business model – hold assets in custody and generate revenue from transaction fees.”

Binance sought to distance itself from the FTX scandal and calm the market by publishing a proof-of-reserves report showing it held enough assets to cover client balances.

But former US Securities and Exchange Commission regulator John Reed Stark said the report “doesn’t address effectiveness of internal financial controls, doesn’t express an opinion or assurance conclusion and doesn’t vouch for the numbers”.

Read related topics:Cryptocurrency

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