Kraken Urges Clearer Crypto Regulations in Australia After Margin Trading Ruling

Kraken is requesting more specific cryptocurrency laws in Australia in the wake of a Federal Court ruling that determined a part of its margin extension product was illegal in the region. Kraken is pushing for a more transparent regulatory environment to benefit investors and businesses in the Australian cryptocurrency industry as a result of the September 8, 2024, ruling.

Regulatory Challenges and Kraken’s Response

In a blog post, Kraken expressed its dissatisfaction with the court’s ruling. The exchange highlighted that Australian crypto investors and businesses face a “confusing and uncertain regulatory environment.” Kraken’s statement underscored that the ruling brings to light significant gaps in the country’s regulatory approach to cryptocurrency. “This lack of clarity is a deeply unsatisfactory ongoing situation for the Australian crypto industry. […] This ruling makes it clearer than ever that bespoke crypto regulation is urgently needed,” Kraken emphasized.

The case involves Bit Trade, a subsidiary of U.S. Payward Incorporated, which faced civil proceedings initiated by the Australian Securities and Investments Commission (ASIC). The proceedings stemmed from Bit Trade’s failure to perform a target market determination before offering its margin trading product to customers. The Federal Court’s ruling against Bit Trade for not meeting legal obligations has set a new precedent in enforcing compliance within Australia’s crypto sector. ASIC’s Deputy Chair, Sarah Court, commented that this decision aims to bolster regulatory adherence in the industry.

Following the court’s ruling, Kraken modified its operations within Australia. The exchange still offers cryptocurrency margin trading without interruption, however it is currently limited to wholesale clients for fiat margin trading. Although Australia has made strides in creating a legislative framework for cryptocurrencies, Kraken is nonetheless worried about possible setbacks. The exchange issued a warning, saying that it might take longer than expected to enact complete crypto laws.

In an effort to improve market participants’ stability and predictability, Kraken has called for more precise norms, which is in line with the larger demand for regulatory clarity in the quickly changing cryptocurrency world.