Kraken Highlights Regulatory Uncertainty in Australia, Criticizes ASIC
Ruholamin Haqshanas is a contributing crypto writer for CryptoNews. He is a crypto and finance journalist with over four years of experience. Ruholamin has been featured in several high-profile crypto...
Cryptocurrency exchange Kraken has raised concerns about the lack of regulatory clarity in Australia following a Federal Court ruling against its fiat margin trading product.
In a recent blog post, Kraken said that Australian crypto businesses and investors continue to operate in a “confusing and uncertain regulatory environment.”
The exchange emphasized that the court’s decision underscores the broader issue of regulatory ambiguity in the country’s approach to cryptocurrency.
“This ruling makes it clearer than ever that bespoke crypto regulation is urgently needed.”
Last year, the Australian Securities and Investments Commission (ASIC) filed civil proceedings against Bit Trade, a subsidiary of Kraken’s parent company, Payward Incorporated.
ASIC accused Bit Trade of failing to meet legal requirements, such as conducting a target market determination, before offering its margin trading product to customers.
The regulator also stressed that since Bit Trade’s product allowed Australians to receive an extension of 5x credit of the asset’s value, it violated regulations by operating as a credit facility.
The Federal Court ruled against Bit Trade in late August.
In its ruling, the court said the platform has breached the country’s Corporations Act section s994B(2) since October 2021.
ASIC Deputy Chair Sarah Court noted that this would “ensure they comply with regulatory obligations in order to protect consumers.”
“It is a legal requirement for financial products to be distributed to consumers appropriately. Consumers should receive the
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