The post Kraken’s Australian Operator Faces $8 Million Fine from ASIC Amid Regulatory Scrutiny and Operational Challenges appeared on BitcoinEthereumNews.com.

Kraken’s Australian operator, Bit Trade Pty Ltd, has been fined $8 million by ASIC for offering unauthorized margin trading products to over 1,100 users. ASIC cited failures in regulatory compliance, including the absence of a target market determination (TMD), leading to significant investor losses. Kraken is facing operational challenges, including workforce cuts and the closure of its NFT marketplace, but it plans a Layer-2 blockchain launch in 2025. The Australian Securities and Investments Commission (ASIC) has fined Kraken’s operator $8 million for regulatory breaches, highlighting risks in crypto investments. Kraken Fined for Investor Harm Bit Trade Pty Ltd, a subsidiary of Payward Incorporated and the operator of the Kraken cryptocurrency exchange in Australia, was hit with an $8 million fine by ASIC. The penalty is a result of Bit Trade’s unauthorized issuance of margin trading products to over 1,100 Australian customers without complying with necessary legal guidelines. In addition to the substantial fine, Bit Trade is required to cover ASIC’s legal costs. According to ASIC, “Legal proceedings launched by ASIC have seen the Australian operator of the Kraken crypto exchange ordered to pay $8 million for unlawfully issuing a credit facility to more than 1,100 Australian customers.” The margin extension product had been offered since October 2021, allowing consumers to borrow funds with the expectation of repayment in either cryptocurrency or fiat currencies, including US dollars. However, Bit Trade did not prepare a target market determination (TMD), a critical document that outlines the suitable audience for financial products according to Australia’s design and distribution obligations (DDO). In a pivotal ruling in August 2024, the Federal Court established that this margin extension product was regarded as a credit facility under Australian law. The absence of a TMD signified that the company violated its regulatory duties with every issuance of the product.…

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Filed under: News - @ December 12, 2024 9:22 am