Disclaimer: Information found on CryptoreNews is those of writers quoted. It does not represent the opinions of CryptoreNews on whether to sell, buy or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk.
CryptoreNews covers fintech, blockchain and Bitcoin bringing you the latest crypto news and analyses on the future of money.
Cryptocurrency exchange Kraken has expressed worries regarding the absence of regulatory clarity in Australia following a Federal Court decision unfavorable to its fiat margin trading offering.
In a recent blog entry, Kraken stated that Australian cryptocurrency enterprises and investors persist in navigating a “confusing and uncertain regulatory environment.”
The exchange highlighted that the court’s ruling emphasizes the larger issue of regulatory vagueness in the nation’s stance on cryptocurrency.
“This ruling makes it clearer than ever that tailored crypto regulation is urgently required.”
ASIC Achieves Victory Over Kraken
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 did not fulfill legal obligations, such as performing a target market determination, prior to offering its margin trading product to clients.
The regulator also pointed out that since Bit Trade’s product enabled Australians to receive an extension of 5x credit based on the asset’s value, it breached regulations by functioning as a credit facility.
The Federal Court ruled against Bit Trade in late August.
In its decision, the court stated that the platform has violated the country’s Corporations Act section s994B(2) since October 2021.
ASIC Deputy Chair Sarah Court remarked that this would “ensure they adhere to regulatory obligations to safeguard consumers.”
Related Posts
“It is a legal requirement for financial products to be distributed to consumers appropriately. Consumers should receive the full protection of the law when engaging with crypto-asset products.”
COURT SLAMS KRAKEN’S BIT TRADE FOR COMPLIANCE FAIL
An Australian court ruled against Kraken’s Australian branch, Bit Trade, regarding compliance issues.
The ruling favored ASIC, stating Bit Trade failed to meet design and distribution regulations and operated as an unlicensed credit facility.… pic.twitter.com/JtHjxbCAS0— IBC Group Official (@ibcgroupio) August 23, 2024
Consequently, Kraken’s fiat margin trading services in Australia are now restricted to wholesale clients, while its crypto margin trading services remain unaffected.
In 2020, Kraken crypto exchange acquired Bit Trade to provide digital asset services in Australia.
Australia’s Crypto Market Experiences Ongoing Growth
The cryptocurrency market in Australia has experienced notable growth in recent years regarding ownership and adoption.
Reportedly, the rate of crypto ownership in Australia stands at 17%, surpassing the global average of 15%.
It is important to note that cryptocurrency has faced increasing scrutiny in Australia.
In May of last year, cryptocurrency exchange Binance Australia informed customers that they would lose access to Australian dollar deposits and withdrawals due to a decision made by its third-party service provider.
In July, officials from the Australian Securities and Investments Commission (ASIC) even conducted searches at Binance Australia’s offices.
In October, the Australian government also introduced a proposal aimed at subjecting digital asset platforms to the same regulations that apply to other financial services providers.
The post Kraken Highlights Regulatory Uncertainty in Australia, Criticizes ASIC appeared first on Cryptonews.
