The Australian Securities and Investments Commission (ASIC) has sued Bit Trade, the Australian provider of the<\/span> Kraken crypto exchange<\/span>. The regulatory body alleges that Bit Trade failed to adhere to design and distribution obligations related to one of its trading products.\u00a0<\/span><\/p>\n The focal point of this dispute revolves around Bit Trade\u2019s margin trading product. Significantly, the financial regulator purports that Bit Trade introduced this product to Australian customers without making a prior target market determination. Since enforcing the design and distribution obligations in October 2021, over 1,160 Australian users have reportedly used Bit Trade\u2019s margin trading service. Consequently, these users experienced a cumulative loss of around $8.35 million or 12.95 million Australian dollars.<\/span><\/p>\n <\/p>\n Moreover, despite being notified by ASIC in June 2022 regarding its shortcomings, Bit Trade allegedly offered its product without the requisite determinations. The margin trading product in question allows clients to get a credit extension of up to five times their collateral value. However, ASIC contends that this offering is a \u201ccredit facility\u201d. It offers users \u201ccredit for transacting in specific crypto assets on the Kraken platform\u201d.<\/span><\/p>\n <\/p>\n Jonathon Miller, who oversees Kraken\u2019s operations in Australia, expressed his astonishment at ASIC\u2019s move. He was under the impression that the product complied with local mandates. Miller mentioned, \u201cWe have been actively engaging with ASIC to ensure our product offering aligns with compliance standards.\u201d He added, \u201cWe were both taken aback and disheartened by today\u2019s enforcement action. We firmly believe that our product aligns with Australian regulations and will persist in seeking clarity on this matter.\u201d<\/span><\/p>\n Sarah Court, ASIC\u2019s deputy chair, emphasized that this action is an essential reminder for the crypto sector. She stated that financial offerings will persistently undergo rigorous evaluation by regulatory bodies. This is to guarantee their compliance with Australia\u2019s stringent consumer protection laws. Hence, she remarked, \u201cASIC\u2019s move underscores the significance of adhering to design and distribution mandates. This ensures that financial products fittingly reach consumers.\u201d<\/span><\/p>\n <\/p>\n Previously, ASIC has shown a strict position on cryptocurrency in the country. In August, the <\/span>regulator launched a lawsuit alleging<\/span><\/a> that eToro Aus Capital Ltd. breached its contract\u2019s design and distribution obligations for difference (CFD) products.<\/span><\/p>\n <\/p>\n \u2713 Share:<\/p>\n <\/a><\/p>\n <!– <\/p>\n <\/p>\n <\/a><\/p><\/div>\n<\/p><\/div>\n <\/p>\n <\/a><\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n –><\/p>\n –><\/p>\n Sunil is a serial entrepreneur and has been working in blockchain and cryptocurrency space for 2 years now. Previously he co-founded Govt. of India supported startup InThinks and is currently Chief Editor at Coingape and CEO at SquadX, a fintech startup. He has published more than 100 articles on cryptocurrency and blockchain and has assisted a number of ICO’s in their success. He has co-designed blockchain development industrial training and has hosted many interviews in past. Follow him on Twitter at @sharmasunil8114<\/a> and reach out to him at sunil (at) coingape.com <\/p><\/div>\n<\/p><\/div>\n The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.<\/p>\n<\/div><\/div>\n<\/p><\/div>\n <!– <\/p>\nMargin Trading Product in Question<\/b><\/h2>\n
Reactions from Kraken\u2019s Australian Branch<\/b><\/h2>\n
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