<div class="coinjournal"> 
 <ul> 
 <li>Bit Trade allegedly neglected to establish a target market determination before offering its margin trading product to Australian clients.</li> 
 <li>Bit Trade first received notification of its non-compliance with these obligations in June 2022.</li> 
 <li>Bit Trade’s margin trading product has been used by at least 1160 Australian customers.</li> 
 </ul> 
 The <a rel="noopener noreferrer nofollow" title="Australia" href="https://thebittimes.com/tag/australia.html">Australia</a>n Securities and Investments Commission (ASIC) has initiated legal proceedings against Bit Trade, the operator of the <a rel="noopener noreferrer nofollow" title="Kraken" href="https://thebittimes.com/tag/kraken.html">Kraken</a> cryptocurrency exchange in <a rel="noopener noreferrer nofollow" title="Australia" href="https://thebittimes.com/tag/australia.html">Australia</a>. The action stems from Bit Trade’s failure to adhere to design and distribution requirements for one of its trading products. 
 As per ASIC’s statement released on September 21st, the financial regulator in Australia alleges that Bit Trade neglected to establish a target market determination before offering its margin trading product to Australian clients. These design and distribution obligations represent a legal mandate for financial product providers operating in Australia. They entail specific guidelines for designing financial products tailored to meet predetermined customer needs and subsequently distributing them through targeted strategies. 
 <blockquote class="twitter-tweet" data-width="500" data-dnt="true"> 
 We are suing Bit Trade, provider of the <a rel="noopener noreferrer nofollow" title="Kraken" href="https://thebittimes.com/tag/kraken.html">Kraken</a> crypto exchange in <a rel="noopener noreferrer nofollow" title="Australia" href="https://thebittimes.com/tag/australia.html">Australia</a>, for allegedly failing to comply with the design and distribution obligations (DDO) for its margin trading product. Since October 2021, customers have lost about $12.95 million https://t.co/MCRYqah0dP pic.twitter.com/zURQ2xDw7M 
 — ASIC Media (@asicmedia) September 20, 2023 
 </blockquote> 
 
 <h2 id="allegations-leveled-against-bit-trade">Allegations leveled against Bit Trade</h2> 
 ASIC contends that since the implementation of these design and distribution obligations in October 2021, Bit Trade’s margin trading product has been used by at least 1160 Australian customers for losing a collective $8.35 million (12.95 million Australian dollars). 
 According to ASIC, Bit Trade received notification of its non-compliance with these obligations in June 2022 but continued offering the product without fulfilling the necessary determinations. 
 Bit Trade’s margin trading product functions as a “margin extension” service, granting customers credit extensions of up to five times the value of the assets they employ as collateral. The regulatory authority asserts that this product effectively qualifies as a “credit facility,” offering customers credit for trading certain cryptocurrencies on the Kraken exchange. 
 ASIC’s deputy chair, Sarah Court, emphasized that these proceedings should serve as a stark reminder to the crypto industry that financial products will continue to undergo scrutiny by regulators to ensure compliance with consumer protection laws in <a rel="noopener noreferrer nofollow" title="Australia" href="https://thebittimes.com/tag/australia.html">Australia</a>. She stated, “ASIC’s actions underscore the importance of complying with design and distribution obligations to ensure that financial products are distributed to consumers in a responsible manner.” 
</div> 
Source: <a rel="noopener noreferrer nofollow" target="_blank" href="https://thebittimes.com/bit-trade-the-kraken-subsidiary-operating-in-australia-sued-by-the-asic-tbt63465.html">https://thebittimes.com/bit-trade-the-kraken-subsidiary-operating-in-australia-sued-by-the-asic-tbt63465.html</a>

Bit Trade, the Kraken subsidiary operating in Australia, sued by the ASIC

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TheBitTimes

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