Australia’s securities regulator has initiated civil proceedings against Bit Trade Pty Ltd, an entity providing Kraken services to Australian users. According to the government agency, the company failed to comply with regulatory obligations meant to ensure proper consumer protection.
Australian Regulator Seeks to Prohibit Kraken Partner From Ongoing Conduct
The Australian Securities and Investments Commission (ASIC) has sued Bit Trade, which provides services from U.S. crypto exchange Kraken in Australia, Reuters reported quoting a statement by the regulator on Thursday.
ASIC alleges that Bit Trade failed to comply with applicable design and distribution (DDO) obligations for its margin trading product and that it continues to offer it despite being notified by the Commission of its concerns in June 2022.
The DDO obligations require financial firms to design products that meet the needs of consumers and distribute them in a targeted manner. ASIC claims that Bit Trade did not make a target market determination for the product before offering it to customers.
The margin trading product in question represents a credit facility as it provides customers credit to buy and sell certain crypto assets on Kraken, the securities regulator explained. ASIC noted that customers can receive an extension of credit of up to five times the value of the assets they use as collateral.
The regulatory body also detailed that at least 1,160 customers had used the margin trading product, incurring a total loss of about 12.95 million Australian dollars ($8.35 million) since the design and distribution began in October 2021.
ASIC is now seeking declarations, pecuniary penalties, and injunctions prohibiting Bit Trade’s ongoing conduct, the report revealed and quoted the Commission’s Deputy Chair Sarah Court as stating:
These proceedings should send a message to the crypto industry that products will continue to be scrutinized by ASIC to ensure they comply with regulatory obligations in order to protect consumers.
Other major exchanges that have had issues this year in Australia, which is yet to comprehensively regulate crypto trading, include . In May, amid a global regulatory crackdown, the biggest exchange for digital assets lost AUD deposit and withdrawal services through two domestic payment providers, Payid and Cuscal.
In July, ASIC canceled the financial services license of FTX Australia, a local entity owned by the failed Bahamas-headquartered cryptocurrency exchange FTX which filed for bankruptcy protection in the United States last November.
Meanwhile, Australia’s largest lender, Commonwealth Bank of Australia (CBA), announced its intention to restrict payments to crypto trading platforms. Its move was followed by another Big 4 Australian bank, National Australia Bank (NAB), which also blocked payments to “high-risk” exchanges.
Do you think Australian authorities will increase the regulatory pressure on crypto trading platforms? Share your thoughts on the subject in the comments section below.
from Bitcoin News https://ift.tt/Xb7JowF
Comments
Post a Comment