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The Australian Securities and Investments Commission (ASIC) has<a href="https://asic.gov.au/about-asic/news-centre/find-a-media-release/2024-releases/24-186mr-asic-wins-case-against-kraken-crypto-exchange-operator-for-design-and-distribution-failure/?altTemplate=betanewsroom"> secured</a> a legal victory against Bit Trade, the operator of Kraken’s services in Australia, over its non-compliance with design and distribution regulations. 
Today, Friday, August 23, an Australian Federal Court ruled against Bit Trade and found it guilty of breaching section s994B(2) of Australia’s Corporations Act since October 2021. 
Bit Trade, an AUSTRAC-registered firm, has offered margin extension products in cryptocurrencies and fiat currencies on behalf of US-based crypto exchange Kraken since 2020.&nbsp; 
However, in September 2023, the ASIC filed a lawsuit against the company, claiming that it violated the country’s regulations with the launch of its margin trading product.&nbsp; According to the regulator, Bit Trade violated Australia’s design and distribution obligations, which require companies to create financial products that cater to the needs of Australians, by failing to specify an appropriate target market or determine the customers the product was best suited for. 
ASIC also emphasized that Bit Trade’s margin product, which allowed Australians to receive up to five times the value of their assets in credit, operated as a credit facility, further breaching regulatory standards. 
According to the court ruling, 
<blockquote>
 “It is a legal requirement for financial products to be distributed appropriately to consumers. Consumers deserve full protection under the law when dealing with crypto-asset products.”
</blockquote> 
ASIC Deputy Chair Sarah Court noted the victory is a “significant outcome” for the regulator. She emphasized the importance of regulatory adherence, stating that this development should remind stakeholders in the industry to “ensure companies meet their obligations to protect consumers.” 
This development follows ASIC’s recent disclosure that since July 2023, it has<a style="color: #0000ff;" href="https://defi-planet.com/2024/08/australian-watchdog-alerts-public-to-ai-fueled-cryptocurrency-scams/"> dismantled</a> over 5,530 fraudulent investment platforms, 1,065 phishing links, and 615 cryptocurrency investment scams. ASIC Deputy Chair Sarah Court noted that, on average, 20 scam investment websites are removed daily. She highlighted that investment scams have caused the greatest financial losses for Australians, amounting to $1.3 billion in 2023. 
&nbsp; 
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The post <a href="https://defi-planet.com/2024/08/asic-wins-lawsuit-against-krakens-australian-operator-for-regulatory-breaches/">ASIC Wins Lawsuit Against Kraken’s Australian Operator for Regulatory Breaches</a> appeared first on <a href="https://defi-planet.com">DeFi Planet</a>.

ASIC Wins Lawsuit Against Kraken’s Australian Operator for Regulatory Breaches

DeFi Planet

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