Key Takeaways:
- An Australian court ruled that Kraken’s local operator, Bit Trade Pty Ltd., breached regulatory requirements by offering a margin product without completing a mandatory “target market determination.”
- The Australian Securities and Investments Commission (ASIC) initiated the case, emphasizing the significance of compliance with the Corporations Act since October 2021.
- ASIC views the ruling as a critical warning to the crypto industry, with financial penalties against Bit Trade under consideration.
An Australian court ruled that Bit Trade Pty Ltd., Kraken’s local operator, breached regulatory requirements by offering a margin extension product to retail clients without completing a mandatory “target market determination” as required by the Corporations Act.
The court found that Bit Trade violated Section 994B, which mandates issuers to define an appropriate market for their products.
The Federal Court has ruled Bit Trade, operator of the Kraken #crypto exchange in Australia, failed to comply with the design and distribution obligations when offering a margin trading product to Australian customers https://t.co/X4SbVkm7Y9 pic.twitter.com/2qLjRvKuz9
— ASIC Media (@asicmedia) August 23, 2024
The Australian Securities and Investments Commission (ASIC) initiated the case, highlighting that Kraken’s margin product has been offered without meeting these obligations since October 2021.
Kraken expressed disappointment but committed to complying with the ruling.
Australia's Federal Court has ruled in favor of the country's corporate regulator, ASIC, in a case against Bit Trade Pty Ltd, the operator of Kraken’s crypto exchange in Australia. https://t.co/l3cYufkZpO
— Decrypt (@decryptmedia) August 23, 2024
ASIC views the decision as a significant warning to the crypto industry to adhere to regulatory standards.
The two parties have seven days to agree on final declarations, with ASIC seeking financial penalties against Bit Trade.
About The Author
Adam Morris, the co-founder of Crypto Head and a respected crypto expert, offers insightful commentary and analysis on cryptocurrency, NFTs, and the evolving digital landscape.
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