EddieJayonCrypto
17 Dec 24
The Federal Court of Australia has fined Bit Trade, operator of cryptocurrency exchange Kraken, $8 million for offering an unapproved margin lending product to local customers. The Australian Securities and Investments Commission (ASIC) alleged that the firm violated financial regulations by issuing...
Bit Trade, operator of cryptocurrency exchange Kraken, has been fined $8 million by the Federal Court of Australia for offering an unapproved margin lending product. The Australian Securities and Investments Commission (ASIC) alleged that the firm violated financial regulations by issuing the credit facility without a Target Market Determination (TMD). Over 1,100 Australian customers paid over $12 million in fees and interest, with combined losses of $7.85 million. A Kraken spokesperson expressed disappointment, calling for tailored cryptocurrency legislation to address regulatory uncertainty. ASIC is consulting with the crypto industry to refine its digital asset guidance, while opposition treasury and financial services spokesperson Luke Howarth criticized the government for leaving the sector in "regulatory limbo," risking growth in the Australian crypto market. The credit facility, which allowed users to leverage borrowed funds backed by digital assets, was issued without a TMD, leading to significant financial losses for customers. The Federal Court of Australia emphasized Bit Trade's serious compliance issues and fined the company $8 million, with additional legal costs. ASIC Chair Joe Longo highlighted the importance of TMDs in protecting consumers and urged digital asset firms to consider their regulatory compliance obligations. Kraken expressed disappointment with the court's ruling, calling for tailored cryptocurrency legislation to address regulatory uncertainty. The Australian regulator is seeking input on updates to its digital asset guidance, while Luke Howarth criticized ASIC's actions for potentially slowing growth in the Australian crypto market.