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Kraken Calls for Clear Crypto Rules in Australia After ASIC Ruling
- Kraken has officially lost its court case with Aussie regulators ASIC, with the Federal Court finding the exchange violated the Corporations Act.
- This resulted in Kraken pulling its fiat Margin Extension service from the majority of its customer base.
- Despite the blow to its product line, Kraken believed the ruling could be good news as it highlighted the need for regulatory reform in the crypto space.
- Kraken believes current regulations in Australia stifle innovation and cause crypto companies to remain in the dark when operating Down Under.
Australia is one of the most active crypto nations in the world, boasting a high ownership percentage and an influx of products like Bitcoin ATMs. However, Government regulation Down Under is still a little murky for operators – at least according to the international exchange Kraken.
Related: Mastercard Enables Non-Custodial Crypto Wallets, Empowering Users to Be Their Own Bank
No More Fiat Margin Trading: Everyday Kraken Traders Lose Access to Service
Kraken, who has over a decade’s worth of history serving Aussie clients, was recently embroiled in a Federal lawsuit due to their Margin Extension product. The Court found in favour of Australia’s regulators ASIC, forcing Kraken to withdraw their fiat margin trading offer to Aussie citizens unless they are a “Wholesale Investor”.
Although Kraken was disappointed in the outcome – after being under the impression its product “fully complied with local laws” – there was one upshot from the ruling. The case proved that Australia is still lagging behind some other nations when it comes to regulatory clarity in the digital asset space.
…the Court’s decision was a win for those of us that are advocating for new laws to govern crypto…the judgement highlighted, and clearly affirmed, that existing Australian law is not effective at regulating crypto.
Kraken Kraken Finds Current Legislation “Deeply Unsatisfactory”
Kraken has vowed to continue working on ways to re-integrate fiat margin trading onto its platform in the coming months, while ensuring it maintains regulatory compliance. For now though, only high-net-worth individuals, professional investors or large corporates can utilise the fiat Margin Extension service.
Related: Coinbase Developer Platform Lead Says “Ton of Demand” for AI-crypto Transactions
However, Kraken’s response to the Court’s ruling demonstrated the knife’s edge some crypto businesses live on when operating in Australia.
This lack of clarity is a deeply unsatisfactory ongoing situation for the Australian crypto industry. Australian crypto investors and businesses continue to operate in a confusing and uncertain regulatory environment.
Kraken The current Australian Government has looked to address crypto regulations in an upcoming draft Bill, however, there are concerns its approval could be delayed until 2025.
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Author
Ben Knight
Ben Knight is a writer and editor from Melbourne with a passion for all things music and finance. He enjoys turning complex topics – especially the technical details of cryptocurrency – into digestible bites that anybody can understand. He acquired his Master’s in Writing, Editing and Publishing from RMIT in 2019 and has run his own creative writing business ever since.
