At the end of August, the court agreed with the Australian Securities and Investment Commission (ASIC), confirming that the cryptocurrency exchange Kraken violated local regulations by offering margin products to retail clients. However, the company operating under the brand Bit Trade Pty Ltd claims that the issue is more complex.

Kraken Margin Trading Ruling Exposes Australia's Crypto Regulation Gap

The ruling, which centered on Kraken's Margin Extension product, determined that margin trading extended in fiat currency to retail investors falls under the Design and Distribution Obligations (DDO) of the Corporations Act. However, the court found that the margin extended in cryptocurrency is not subject to the same regulations.

While ASIC hailed the decision as a victory, Kraken argues it exposes significant gaps in the country's approach to crypto regulation.

“This ruling makes it clearer than ever that bespoke crypto is urgently needed,” Kraken commented in the new blog post. “Australian crypto investors and businesses continue to operate in a confusing and uncertain regulatory environment.”