Crypto
ASIC Takes Legal Action Against Australian Bit Trade on Kraken
The Australian Securities and Investments Commission (ASIC) has targeted it over its alleged incapability to fulfill the obligations related to the distribution and design of its trading product.
The crypto exchange Kraken’s Australia-based operator Bit Trade is currently witnessing legal action. The Australian Securities and Investments Commission (ASIC) has targeted it over its alleged incapability to fulfill the obligations related to the distribution and design of its trading product. On 21 September, the ASIC released a statement and asserted that Bit Trade did not develop a target market determination.
Kraken’s Bit Trade Witnesses a Legal Action Taken by Australian Regulator
This was its responsibility before the availability of the product related to margin trading for Australian consumers. The distribution and design-related obligations play the role of mandatory requirements implemented on Australia-based financial product-providing firms. The respective obligations involve structuring financial products for alignment with the predefined requirements of the clients.
The other things include their distribution via a targeted strategy. ASIC asserted that since these obligations’ introduction in 2021’s October, 1,160 consumers from Australia used margin trading of Bit Trade. This resulted in a cumulative loss of nearly $8.35M (up to 12.95M Australian dollars). The regulator highlighted that Bit Trade was not compliant with the above-mentioned obligations in June last year.
Kraken Executive Expresses Surprise on ASIC’s Legal Action
Irrespective of this caution, ASIC accuses Bit Trade of continuously offering the product while not fulfilling the required determinations. Jonathon Miller, Kraken’s managing director for Australian operations, also commented on this development. He expressed astonishment at the actions that the ASIC takes as he thinks that the product complies with regional regulations.
Also Read: Crypto Firms’ Response to Unjustified US Regulatory Actions
In addition to this, Miller stressed that the platform had been actively attempting to communicate with the Australian regulator. As per the executive, the purpose is to guarantee the compliance of the firm’s product offering. Eventually, ASIC started civil proceedings to confront Bit Trade, accusing the firm of not fulfilling the distribution and design obligations concerning its trading product.
