The cryptocurrency market is facing a short-term correction after a sustained bull run since early November. Among the altcoins, Binance's native token, BNB, has dropped 1.5% in the past day but is up 1.64%.

This is despite the latest legal challenges facing the exchange in Australia. The Australian Securities and Investments Commission (ASIC) is suing Binance Australia. The lawsuit claims the crypto exchange giant misclassified over 500 retail investors as wholesale clients, denying them essential protections under Australian financial law.

More than $100 Billion Market Cap

Currently ranked sixth with a market capitalization of $103 billion, the digital asset is changing hands at $717 behind Solana, which traded at $216 at the time of publication with a slightly higher market capitalization.

ASIC's alleged oversight by the exchange, which spans 2022 and 2023, could reportedly have exposed clients to significant financial risks. The case involves the classification of 83% of its Australian client base as wholesale investors.

The regulator faulted Binance's Australian arm for reportedly failing to provide a product disclosure statement to retail clients or develop a target market determination for its crypto derivatives. It also accused the exchange of failing to maintain a compliant internal dispute resolution system or ensure the effective provision of financial services.

Interestingly, Binance compensated affected clients with $13 million in 2023. However, ASIC is seeking penalties, declarations, and adverse publicity orders in court.

The lawsuit comes as ASIC increases its regulatory oversight of digital assets. Earlier this month, the agency released a consultation paper aimed at clarifying how existing financial product definitions apply to digital assets.

Global Regulatory Scrutiny

This legal battle in Australia is just one of Binance's many challenges. Globally, the crypto exchange faces mounting scrutiny. In November 2023, Binance exited the US market following a $4.3 billion settlement with the Justice Department.

Recently, the company's CEO, Richard Teng, reportedly stated that discussions about re-entering the US market remain premature, highlighting the company's current focus on global expansion.

Technically, BNB is on an upward trend and could claim a higher price level despite the legal challenges. Although the price could potentially retreat to the trending line, it is still below the overbought zone. This is based on TradingView's Relative Strength Indicator (RSI), which is currently at 56. Whether BNB could reach $1,000 depends on strong fundamentals and the overall positive crypto sentiment.