Australia’s Regulator Imposes $5M Fine on Kraken’s Operator

According to a press release from the Australian Securities and Investments Commission on December 12, the operator of cryptocurrency exchange Kraken in Australia, Bit Trade, has been fined AUD 8 million (equivalent to about $5.2 million) for illegally providing a credit facility to more than 1,100 customers.

The company was found to be in violation of Australian laws requiring financial products to have a target market determination to ensure that they are sold to the appropriate customers.

In October 2021, Bit Trade introduced a margin extension product that allowed customers to make and repay margin extensions in digital assets such as Bitcoin or traditional currencies like US dollars.

However, the product was marketed without the necessary target market determination, which is a key regulatory document that ensures financial products are only available to suitable customers.

The court concluded that Bit Trade’s product consistently failed to meet design and distribution obligations each time it was issued without a target market determination.