Kraken, the cryptocurrency exchange is not satisfied with the performance of its regulator in Australia. Kraken has expressed disappointment over Bit Trade’s inefficiencies in evaluating the target market before offering margin trading products in Australia. Due to this, ASIC (The Australian Securities and Investments Commission) has initiated legal procedures against Bit Trade.
Bit Trade is Kraken’s provider in Australia and has failed to comply with distribution and design rules for one of Kraken’s products. ASIC sued Bit Trade on the 21st of September 2023 for not making a target market determination beforehand offering a product of margin trading to the Australians.
Australia’s Trading Infrastructure
In Australia, it is compulsory to comply with the design and distribution laws to offer or trade financial products. The obligations are designed to meet the specific design carved for selling financial products. And, trading firms are supposed to address the pre-determined need of the customers and then stick to the disclosed plan for selling or trading financial products.
ASIC’s Claims and Legal Actions against Bit Trade
ASIS declares to sue Bit Trade, the provider of Kraken in Australia for DDO (Design and Distribution Obligation) violation. ASIC claims that Bit Trade has allegedly failed to do so over margin trading of its products. Due to this, Australian customers have lost more than 12.95 million dollars.
Regulators claimed that they introduced design and distribution obligations (DDO) back in October 2021. Since then, more than 1160 customers have been using the margin trading product of Bit Trade and have lost 12.95 million Australian dollars. ASIC sued Bit Trade for doing so without carving the relevant determinations.
Kraken’s Comments Over ASIC‘s Allegations
The managing director of Kraken, Jonathon Miller shared his disappointing remarks with the media. He said that, according to the firm they are completely complying with the rules and regulations of Australian watchdogs. We have been in touch with ASIC regarding our operations and offering margin trading products in Australia. He showed disappointment over ASIC’s claims and actions.
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