Kraken criticizes Australia’s ‘uncertain’ crypto rules after court ruling

Kraken is calling for clearer crypto regulations in Australia after a Federal Court ruled that part of its margin extension product violated local laws.

Cryptocurrency exchange Kraken is advocating for clearer crypto regulations in Australia after a Federal Court ruled that its fiat margin trading product violated local laws.

In a Sept. 8 blog statement, Kraken expressed disappointment with the judgment, saying Australian crypto investors and businesses “continue to operate in a confusing and uncertain regulatory environment.” The exchange also emphasized that the ruling highlights broader regulatory shortcomings in the country’s approach to crypto.

“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

In September 2023, the Australian Securities and Investments Commission launched civil proceedings against Bit Trade, a subsidiary of U.S. Payward Incorporated, for failing to conduct a target market determination for its product before offering it to customers.

In late August, Australia’s Federal Court ruled against Bit Trade for failing to comply with legal obligations when offering a margin trading product. ASIC’s Deputy Chair Sarah Court stated that the ruling aims to set a precedent for enforcing crypto compliance in Australia.

Following the ruling, Kraken’s margin trading in fiat is now restricted to wholesale clients in Australia, while crypto margin trading remains unaffected, the exchange noted. While the exchange acknowledged Australia’s progress towards establishing a “regulatory framework for crypto,” it still cautioned that the legislation might be “delayed beyond the end of the year.”