World Crypto Global
- Written by: Damian Chmiel
- Mon, 09 Sep 2024
- Israel
At the endof August, the court agreed with the Australian Securities and InvestmentCommission (ASIC), confirming that the cryptocurrency exchange Krakenviolated local regulations by offering margin products to retail clients.However, the company operating under the brand Bit Trade Pty Ltd claims thatthe issue is more complex.Kraken Margin TradingRuling Exposes Australia's Crypto Regulation GapThe ruling,which centered on Kraken's Margin Extension product, determined that margintrading extended in fiat currency to retail investors fallsunder the Design and Distribution Obligations (DDO) of the Corporations Act.However, the court found that the margin extended in cryptocurrency is not subjectto the same regulations.While ASIChailed the decision as a victory, Kraken argues it exposes significant gaps inthe country's approach to crypto regulation.Thisruling makes it clearer than ever that bespoke crypto regulation is urgentlyneeded, Kraken commented inthe new blog post. Australian crypto investors and businessescontinue to operate in a confusing and uncertain regulatory environment.Understanding ASIC's Recent Judgment: The Need for a Clear Crypto Regulatory Framework in AustraliaRead more: https://t.co/9NhoiC82ii#ASIC #CryptoRegulation #Kraken #MarginTrading #Australia pic.twitter.com/h826lWyLTv sinyalbak (@sinyalbak) September 9, 2024Thejudgment comes as Australia lags behind other jurisdictions in implementingcomprehensive crypto regulations. Despite ongoing consultations and efforts bythe Treasury, legislation could be delayed beyond the end of the year,potentially hampering the industry's growth and innovation.In the past, theexchange has experienced regulatory issues in other regions of the world, including in the US. Almosta year ago, it was sued by The Securities and Exchange Commission (SEC) forillegally operating an unregistered securities exchange, broker, dealer, andclearing agency.Kraken Changes Margin ProductsIn responseto the newest Australian court ruling, Kraken has implemented immediate changesto its Margin Extension product. Margin trading with fiat is now restricted forAustralian residents unless they qualify as Wholesale Investors under theCorporations Act. These restrictions do not apply to margin extensions whentrading with crypto assets (including pairs like BTC/ETH or BTC/USDT).Wecomply with legal and regulatory requirements in all jurisdictions in which weoperate, Krakenadded. Kraken is committed to expanding its compliant product offeringand is working on additional eligibility pathways for fiat margin extensions inthe coming months.The casehighlights the global race to provide tailored regulation for crypto assets,with countries like the United States, United Kingdom, and Singapore makingstrides in this area. Clear and proportionate frameworks are seen as crucialfor allowing individuals to safely harness the potential of blockchaintechnology while ensuring appropriate regulatory protections.This article was written by Damian Chmiel at www.financemagnates.com.
