{"id":36525,"date":"2024-08-23T11:20:15","date_gmt":"2024-08-23T11:20:15","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/australian-federal-court-rules-against-kraken-operator-for-breaching-corporations-act\/"},"modified":"2024-08-23T11:20:15","modified_gmt":"2024-08-23T11:20:15","slug":"australian-federal-court-rules-against-kraken-operator-for-breaching-corporations-act","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/australian-federal-court-rules-against-kraken-operator-for-breaching-corporations-act\/","title":{"rendered":"Australian Federal Court Rules Against Kraken Operator for Breaching Corporations Act"},"content":{"rendered":"

(Originally posted on : Crypto News – iGaming.org )<\/b>
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Bit Trade Pty Ltd, the company running Australia\u2019s Kraken cryptocurrency exchange, has been found to have broken a crucial clause in the Corporations Act by the Federal Court of Australia. The Australian Securities and Investments Commission (ASIC) filed the lawsuit, which charged Bit Trade with not adhering to the rules governing financial products.<\/p>\n

Section 994B of the Corporations Act, which requires financial product issuers to develop a \u201ctarget market determination\u201d prior to presenting the product to customers, was the main topic of the case. According to Justice Nicholas, Bit Trade violated this clause by providing its \u201cmargin extension\u201d product to retail customers without adhering to the necessary procedures. The court highlighted that Bit Trade had been selling the product without the legally required market evaluation on the Kraken platform since October 5, 2021.<\/p>\n

ASIC went on to say that the judge distinguished between duties on digital assets and requirements on national currencies. He discovered that although paying back a digital asset did not amount to paying back money, extending a margin loan in local currency did result in deferred debt, which is why it was classified as a credit facility under the law.<\/p>\n

Kraken\u2019s Response and Regulatory Implications<\/h2>\n

Kraken expressed disappointment with the ruling but acknowledged its obligation to comply. A Kraken spokesperson noted, \u201cWe\u2019re pleased the judge understood the nuances in this case and recognized the challenges in applying existing regulatory frameworks to innovative technologies.\u201d<\/em> Kraken highlighted that the ruling underscored the need for clearer legislation, particularly regarding the application of the Design and Distribution Obligations to fiat currency but not to cryptocurrency.<\/p>\n

ASIC views the court\u2019s decision as a landmark in its efforts to regulate the crypto industry. Sarah Court, ASIC Deputy Chair, stated, \u201cThis is a significant outcome for ASIC involving a major global crypto firm. We initiated proceedings to send a message to the crypto industry that we will continue to scrutinize products to ensure they comply with regulatory obligations in order to protect consumers.\u201d<\/em><\/p>\n

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The court has given both parties seven days to agree on declarations and injunctions, and ASIC has indicated it will seek financial penalties against Bit Trade.<\/p>\n<\/p><\/div>\n

Source link <\/a>
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(Originally posted on : Crypto News – iGaming.org ) Bit Trade Pty Ltd, the company running Australia\u2019s Kraken cryptocurrency exchange, has been found to have broken a crucial clause in the Corporations Act by the Federal Court of Australia. The Australian Securities and Investments Commission (ASIC) filed the lawsuit, which charged Bit Trade with not […]<\/p>\n","protected":false},"author":34,"featured_media":36526,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[34],"tags":[],"_links":{"self":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/36525"}],"collection":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/users\/34"}],"replies":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/comments?post=36525"}],"version-history":[{"count":0,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/36525\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media\/36526"}],"wp:attachment":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media?parent=36525"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/categories?post=36525"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/tags?post=36525"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}