Binance Australia employees were allegedly incompetent and misclassified hundreds of retail mum-and-dad investors as “sophisticated” entities, exposing them to highly speculative and risky cryptocurrency products, the corporate watchdog claims.

The Australian Securities and Investments Commission sued Binance, which is the world’s largest cryptocurrency exchange, on Tuesday. ASIC alleges the company breached its licence and local laws for more than 12 months, leading to these unsophisticated customers losing $13.1 million.