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Australian Securities and Investments Commission Takes Legal Action Against Bit Trade, Kraken Partner

Bit Trade Pty, a partner of Kraken that operates in Australia, is being sued by the Australian Securities and Investments Commission (ASIC) for failing to meet regulatory obligations. The regulator claims that Bit Trade did not comply with the design and distribution obligations for its margin trading product.

Bit Trade, which has been serving Australian customers since 2020, offers a margin product through Kraken. The product allows users to trade digital assets with leverage, with the value of the collateral being five times the leverage.

ASIC Deputy Chair Sarah Court emphasized the importance of complying with regulatory obligations to protect consumers. The lawsuit serves as a message to the crypto industry that ASIC will continue to scrutinize products to ensure compliance.

According to ASIC, approximately 1,160 Australian customers have used Bit Trade’s margin trading product and have collectively lost around $12.95 million.

ASIC stated that it raised concerns about Bit Trade’s non-compliance in June 2022. However, the company continues to offer the product to Australian customers.

The regulator is seeking declarations, pecuniary penalties, and injunctions to prevent further alleged non-compliant conduct by Bit Trade.

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