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The U.S.-based cryptocurrency exchange Kraken has launched a new range of crypto derivatives specifically for wholesale clients in Australia, aimed at complying with regulatory standards following a recent legal challenge in the nation.
This introduction highlights Kraken’s dedication to the Australian market and its initiatives to deliver secure and compliant services for institutional investors amidst a shifting regulatory environment, as stated in a blog post on Monday by the exchange.
Kraken’s latest derivatives offering allows institutional clients to gain exposure to cryptocurrency price fluctuations via futures derivatives without needing to possess the underlying assets.
Kraken’s New Derivatives Product Includes Multi-Collateral Support
The service features multi-collateral support—permitting collateral in fiat, stablecoins, and cryptocurrencies—within a highly secure custodial framework that encompasses over 200 tradable assets.
This launch comes in the wake of a decision by Australia’s Federal Court in August against Kraken’s local entity, Bit Trade Pty Ltd.
“Australian wholesale clients are seeking the ability to implement advanced trading strategies through a licensed broker supported by Kraken’s stringent security measures,” stated Jonathon Miller, Kraken’s General Manager for Australia.
“Our new premium product fulfills our clients’ trading requirements and assists them in progressing in their crypto journey.”
Hey Australia
– exciting news!
We are now providing access to crypto-based derivatives for qualified wholesale clients via our Australian financial services licensed broker.
Read more here: https://t.co/beFhgGaGGm pic.twitter.com/wl1jbfMVjE— Kraken Exchange (@krakenfx) November 3, 2024
To be eligible for Kraken’s derivatives offerings, individuals must possess net assets exceeding AUD $2.5 million (USD $1.64 million) and a gross annual income above AUD $250,000 (USD $164,000) for the previous two years.
Qualified clients can start exploring the new service on Kraken’s support page, with current clients able to verify eligibility through the Kraken Pro app.
Kraken Raises Concerns About Regulatory Ambiguity in Australia
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Recently, Kraken expressed concerns regarding the lack of regulatory clarity in Australia following a Federal Court ruling against its fiat margin trading product.
The exchange indicated that Australian crypto enterprises and investors continue to function in a “confusing and uncertain regulatory landscape.”
Kraken underscored that the court’s verdict highlights the broader issue of regulatory ambiguity in the country’s stance towards cryptocurrency.
“This ruling makes it clearer than ever that tailored crypto regulation is urgently needed.”
Last year, the Australian Securities and Investments Commission (ASIC) initiated civil proceedings against Bit Trade, a subsidiary of Kraken’s parent company, Payward Incorporated.
ASIC alleged that Bit Trade failed to comply with legal stipulations, such as conducting a target market determination, prior to offering its margin trading product to clients.
The regulator also noted that since Bit Trade’s product permitted Australians to receive an extension of 5x credit of the asset’s value, it infringed regulations by operating as a credit facility.
The Federal Court ruled against Bit Trade in late August.
In its decision, the court stated that the platform had violated the country’s Corporations Act section s994B(2) since October 2021.
The cryptocurrency market in Australia has experienced considerable growth in recent years regarding ownership and adoption.
As reported, the rate of crypto ownership in Australia stands at 17%, surpassing the global average of 15%.
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