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

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

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

Kraken expressed disappointment with the decision in a blog post dated September 8, saying Australian crypto investors and businesses “continue to operate in a confusing and uncertain regulatory environment.” The exchange also stressed that the decision highlights broader regulatory shortcomings in the country’s approach to crypto.

“This uncertainty is an ongoing situation that is deeply unsatisfactory for the Australian crypto industry. […] “This decision makes it clearer than ever that dedicated crypto regulation is urgently needed.”

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In September 2023, the Australian Securities and Investments Commission launched legal action against Bit Trade, a subsidiary of US Payward Incorporated, for failing to identify a target market before offering its product to customers.

In late August, the Australian Federal Court ruled against Bit Trade for failing to comply with its legal obligations when offering a margin trading product. ASIC Deputy Chair Sarah Court said the decision was intended to set a precedent for ensuring crypto compliance in Australia.

Following the decision, Kraken’s fiat margin trading is now limited to wholesale clients in Australia, while crypto margin trading remains unaffected, the exchange noted. While acknowledging Australia’s progress toward establishing a “regulatory framework for crypto,” the exchange still warned that legislation “could be delayed beyond the end of the year.”