Australia’s financial regulator, the Australian Securities and Investments Commission (ASIC), announced on Thursday that the Federal Court has imposed an AU$8 million ($5.1 million) fine on Bit Trade, the local operator of cryptocurrency exchange Kraken. The penalty stems from the unlawful issuance of a credit facility to more than 1,100 customers in Australia.
The case originated from civil proceedings filed by ASIC last year, which accused Bit Trade of non-compliance with regulatory requirements for its margin trading product. According to ASIC, Bit Trade failed to appropriately assess whether the product was suitable for the consumers it targeted, leading to customer losses exceeding $5 million.
“Bit Trade’s margin extension product was issued to over 1,100 Australian consumers, who paid over $7 million in fees and interest without proper consideration of whether the product met their needs,” ASIC stated. The margin trading product allowed users to access credit or loans, repayable either in digital assets like bitcoin or in national currencies such as the U.S. dollar.
Kraken expressed disappointment with the court’s decision in a statement, saying, “We believe these rulings significantly hinder growth in Australia’s economy. We are committed to working collaboratively with policymakers and regulators as the rules evolve.”
सम्बंधित ख़बरें
In August, the Federal Court determined that the margin trading product qualified as a credit facility because it offered extensions in national currencies. This classification requires providers to issue a mandatory “target market determination” document outlining the specific customer group for whom the product is suitable.
ASIC noted that this is the first enforcement action of its kind against a company for failing to issue such a determination.
