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 statement released in September 2023, Kraken expressed disappointment with the judgment, noting that Australian crypto investors and businesses continue to operate in a confusing and uncertain regulatory environment. The exchange emphasized that the ruling underscores 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.

In September 2023, the Australian Securities and Investments Commission (ASIC) 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 acknowledged Australia’s progress towards establishing a regulatory framework for crypto but cautioned that the legislation might be delayed beyond the end of the year.

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