The post Kraken Exchange Fined $5.1M AUD for Unauthorized Margin Trading in Australia appeared on BitcoinEthereumNews.com.

TLDR Kraken fined $5.1 million AUD by Australian court for offering margin lending without proper regulatory approval Over 1,100 Australian customers were affected, with users charged over US$7 million in fees and interest One investor lost almost US$4 million through the platform’s margin extension product The product was offered without a required target market determination (TMD) since October 2021 This marks ASIC’s first penalty against a digital asset exchange for TMD violations Australian financial regulators have imposed a $5.1 million AUD fine on cryptocurrency exchange Kraken for operating an unauthorized margin lending service that affected more than 1,100 Australian customers. The penalty comes after the Australian Federal Court found that Bit Trade, which operates Kraken in Australia, had violated financial regulations by offering its “margin extension” product without obtaining proper regulatory approval since October 2021. The Australian Securities and Investments Commission (ASIC) brought the legal action against the exchange after discovering that Kraken had failed to secure a target market determination (TMD) for its margin lending product. This product allowed users to trade with borrowed funds using either cryptocurrencies like Bitcoin or traditional currencies such as U.S. dollars as collateral. Court documents reveal that Australian customers were charged more than US$7 million in fees and interest through the unauthorized service. In one notable case, a single investor suffered losses approaching US$4 million. The Federal Court’s ruling highlighted that Bit Trade continued offering the margin trading service even after being informed of its regulatory obligations. Justice Nicholas, who presided over the case, pointed to this behavior as evidence of “a seriously deficient compliance system.” According to ASIC Chair Joe Longo, the exchange prioritized revenue generation over regulatory compliance. The court determined that Kraken’s violations were deliberate and driven by profit motives rather than oversight or technical errors. The penalty marks a…

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Filed under: News - @ December 16, 2024 4:20 pm