In response, the crypto exchange accepted the court’s decision, yet emphasized the urgency for more transparent cryptocurrency regulations in Australia.
Kraken Eyes Clearer Crypto Regulations in Australia
Adapting to the ruling, the exchange modified its margin trading services, limiting fiat margin trading to wholesale investors only, leaving crypto margin trading unchanged. In a recent update, Kraken reiterated its dedication to adhering to compliance standards and advocated for better regulatory clarity within the cryptocurrency sector.
According to the exchange:
“At the heart of the judgment, the Court determined that when we extended margin in fiat currency to clients it was (and is) subject to the Design and Distribution Obligations (DDO) of the Corporations Act. This was not the case when we extended margin to clients in cryptocurrency.”
The company recognized the court’s decision but highlighted its broader implications for cryptocurrency regulation in Australia. The company said it views the court’s decision as a positive step for advocates seeking new cryptocurrency regulations, despite some disappointment that the ruling identified a violation of the Corporations Act in part of it’s margin product. It stated that the judgment underscored the ineffectiveness of existing Australian laws in regulating cryptocurrency..
The firm, being one of the top crypto exchanges, pointed out that this decision further emphasizes the pressing need for clear and specific regulations for the crypto industry in Australia. The current legal framework leaves both investors and businesses in a state of uncertainty, potentially hindering innovation.
Restricting Fiat Margin Trading in Australia Following Court Ruling
Following the court ruling, Kraken promptly adjusted its margin trading services to align with legal mandates. The platform has now limited margin trading with fiat currency to Australia’s residents who qualify as wholesale investors, as defined by the Corporations Act 2001. However, these changes do not impact margin trading involving cryptoassets.
This adjustment enables unrestricted margin trading in cryptocurrency pairs, while access to fiat margin extensions is confined to wholesale investors. Kraken also reiterated its commitment to maintaining compliance across all jurisdictions in which it operates.
