Kraken operator Bit Trade to pay $8m fine in its ASIC court loss
Make us a preferred source
Make us a preferred source on Google
The news: Crypto exchange operator Bit Trade must pay $8 million for its failure to comply with design and distribution obligations (DDO) when offering a margin trading product to Australian customers, Federal Court of Australia Judge John Nicholas has ordered.
The context: The Australian Securities and Investments Commission (ASIC) announced its lawsuit last September, accusing Kraken operator Bit Trade of failing to make a “target market determination” that outlined the appropriate customers for its margin trading product.
The product allows customers to trade certain crypto assets with up to five times leverage. The regulator alleged that Bit Trade’s “margin extension” was a credit facility.
Nicholas found in August that the obligation to repay a digital asset was not an obligation to repay money and therefore was not a deferred debt.
Nicholas agreed with ASIC that a margin extension in a national currency created a deferred debt, meaning the product was a credit facility.
The case was expected to set a precedent for how margin lending facilities fit within Australia's credit and financial product regulation when linked to crypto products.
The source: Federal Court
