ASIC said Bit Trade indiscriminately offered crypto asset margin trading services and products to Australian clients without identifying its target audience. The regulator claims that Bit Trade’s margin trading product is a line of credit, as customers are offered loans when selling and buying certain crypto assets on the Kraken exchange. Customers can extend this loan to an amount up to five times the value of the assets used as collateral.
Bit Trade has been offering margin trading products to Australian clients through the Kraken exchange since January 2020. ASIC claims that at least 1,160 Australian users have used the product since October 5, 2021, with total losses of approximately $12.95 million. ASIC notified Bit Trade of its concerns in June 2022, but the platform continues to offer the product to local traders, violating regulatory requirements.
ASIC demanded that the court impose a monetary fine on Bit Trade and impose an injunction against further promoting the product to local residents. The court has not yet set a date for the first hearing in the case.
Kraken exchange bought Australian trading platform Bit Trade in 2020. Kraken Australia managing director Jonathon Miller said ASIC’s enforcement action came as a surprise to him. The exchange’s management was confident that the product offered met local requirements. According to Miller, Kraken is trying to constructively interact with the regulator to ensure that its cryptocurrency products do not violate Australian law.
In early August, ASIC made similar claims to the cryptocurrency platform eToro, pointing out that the platform offers high-risk derivatives aimed at a wide audience.
Source: Bits
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