ASIC Wins Case Against Kraken's Local Operator, Bit Trade Pty Ltd

The Australian Securities and Investments Commission (ASIC) has won a case against Kraken's local operator, Bit Trade Pty Ltd.

Australian financial regulator the Australian Securities and Investments Commission (ASIC) has won a case against Kraken’s local operator, Bit Trade Pty Ltd.

ASIC sued Bit Trade in September 2023, alleging that the crypto exchange operator failed to comply with the design and distribution obligations for the margin trading product it offered to Australians via Kraken.

According to a judgment dated August 23, the Federal Court of Australia ruled that Bit Trade violated Section 994B(2) of the Corporations Act when it provided its “margin extension” product to Australian customers via Kraken without a target market determination, as stipulated in the provision.

ASIC alleged that this product was available to users from October 5, 2021. The regulator noted that it provided for margin extensions to be made and repaid either in crypto assets or national currencies.

Describing it as a “significant” outcome involving a major global crypto firm, ASIC Deputy Chair Sarah Court said the ruling should remind the digital assets industry that the regulator would continue to scrutinize products to ensure compliance and consumer protection.

Per ASIC’s announcement, the parties have been given seven days to agree on declarations and injunctions. After that, the regulator will seek financial penalties against Bit Trade “on a date to be set.”

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