Australias Regulator Wins Case Against Krakens Local Operator

Australia’s Federal Court ruled against Kraken’s local operator for failing to comply with legal obligations when offering a margin trading product.

Australia’s court has ruled that Bit Trade, the operator of the Kraken crypto exchange in Australia, violated regulatory requirements by offering a margin trading product without complying with design and distribution obligations.

In an Aug. 23 press release, the Australian Securities and Investments Commission said the ruling is marking a significant regulatory action against a major global crypto player. ASIC Deputy Chair Sarah Court added that with the ruling the regulator wanted to “send a message to the crypto industry” that it will continue to “scrutinize products to ensure they comply with regulatory obligations in order to protect consumers.”

Per ASIC, since October, 2021, Bit Trade’s “margin extension” product was available to Kraken customers without the legally mandated target market determination, violating section 994B(2) of the Corporations Act, which requires the financial product issuer to identify the suitable consumer group.

The court found that while the obligation to repay a crypto asset under the margin extension product does not constitute a deferred debt, repayment in national currencies does, making the product a credit facility. ASIC and Bit Trade have been given seven days to agree on declarations and injunctions, with ASIC seeking financial penalties against the company at a later date.

Commenting on the ruling, a spokesperson for Kraken told the media that the ruling is “another reminder of how cryptoassets are a novel technology.”

RECENT NEWS

Ether Surges 16% Amid Speculation Of US ETF Approval

New York, USA – Ether, the second-largest cryptocurrency by market capitalization, experienced a significant surge of ... Read more

BlackRock And The Institutional Embrace Of Bitcoin

BlackRock’s strategic shift towards becoming the world’s largest Bitcoin fund marks a pivotal moment in the financia... Read more

Robinhood Faces Regulatory Scrutiny: SEC Threatens Lawsuit Over Crypto Business

Robinhood, the prominent retail brokerage platform, finds itself in the regulatory spotlight as the Securities and Excha... Read more

Trump Spouts False Economic Claims Ahead Of Crypto Summit

The White House held its first-ever “crypto summit” on Friday, gathering top execs from digital asset firms to chat ... Read more

Gemini, Backed By Winklevoss Twins, Taps Goldman Sachs And Citigroup To Explore IPO

Gemini, the cryptocurrency exchange and custodian founded by billionaire twins Cameron and Tyler Winklevoss, has confide... Read more

BTC, ETH, XRP, Altcoin Prices At Risk: Nasdaq 100 Loses Key Support

Cryptocurrency prices resumed their downward trend after President Donald Trump hosted top executives for the White Hous... Read more