1. BITBILIHome
  2. Article

ASIC initiates legal action against Bit Trade over its crypto product

• 63 views

TL;DR Breakdown

  • Australian regulator ASIC has commenced legal proceedings against Bit Trade over crypto margin trading.
  • Regulatory scrutiny in Australia’s crypto industry.

Description

The Australian Securities and Investments Commission (ASIC) has initiated civil proceedings against Bit Trade, the operator of the Kraken cryptocurrency exchange in Australia. The lawsuit alleges that Bit Trade failed to meet design and distribution obligations for one of its trading products, a margin trading offering. According to ASIC’s statement released on September 21, the … Read more

The Australian Securities and Investments Commission (ASIC) has initiated civil proceedings against Bit Trade, the operator of the Kraken cryptocurrency exchange in Australia. The lawsuit alleges that Bit Trade failed to meet design and distribution obligations for one of its trading products, a margin trading offering. According to ASIC’s statement released on September 21, the financial regulator asserted that Bit Trade did not create a target market determination before making its margin trading product available to Australian customers.

ASIC said the firm refused to follow legal requirements

According to ASIC, the design and distribution obligations are legal requirements imposed on firms offering financial products in Australia. They mandate that companies design financial products that align with the predetermined needs of customers and distribute them through a targeted plan. ASIC’s claims stem from the introduction of these obligations in October 2021. It alleges that, since then, at least 1,160 Australian customers engaged with Bit Trade’s margin trading product, resulting in a collective loss of approximately $8.35 million (12.95 million Australian dollars).

Notably, ASIC stated that it had informed Bit Trade of its non-compliance with these obligations in June 2022. Despite this notification, the regulator asserts that Bit Trade continued to offer the product without making the necessary determinations. In response to ASIC’s legal action, Jonathon Miller, the managing director of Kraken’s Australian operations, expressed surprise, believing that the product adhered to local obligations. Miller also stated that the firm has been trying to constructively engage with ASIC on the issue for some time to ensure the product remains compliant.

Regulatory scrutiny in Australia’s crypto industry

Jonathan Miller further emphasized the firm’s disappointment in receiving the enforcement action, reiterating the belief that the product was offered in compliance with Australian law. Bit Trade’s margin trading product provides a “margin extension” service, enabling customers to receive credit extensions of up to five times the value of the assets they use as collateral. However, ASIC contends that this product effectively constitutes a “credit facility” by offering customers “credit for use in the sale and purchase of certain crypto assets on the Kraken exchange.”

ASIC’s deputy chair, Sarah Court, emphasized that these proceedings serve as a reminder to the crypto industry that financial products will undergo regulatory scrutiny to ensure they comply with consumer protection laws in Australia. The court mentioned that ASIC’s action should remind firms of the importance of complying with the design and distribution obligations so that financial products are distributed to consumers appropriately.

ASIC’s legal action against Bit Trade, the operator of the Kraken cryptocurrency exchange in Australia, highlights the regulatory scrutiny that the crypto industry faces concerning the design and distribution of financial products. The allegations revolve around Bit Trade’s margin trading product and its failure to create a target market determination as required by Australian law. This case underscores the ongoing efforts by financial regulators to uphold consumer protection laws in the cryptocurrency sector and signals the need for industry players to ensure strict compliance with regulatory requirements.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

文章来源于互联网:ASIC initiates legal action against Bit Trade over its crypto product

Disclaimers:

1. You are solely responsible for your investment decisions and this info is not liable for any losses you may incur.

2. The copyright of this article belongs to the writer, it represents the writer's opinions only, not represents the site's ones. Not financial advice.

Previous 2023年9月22日 10:34
Next 2023年9月22日 13:28

Related articles

  • Controversial Parrot Protocol Proposal Sparks Outcry as Investors Face -89% Returns

    TL;DR Breakdown Parrot Protocol’s proposal to go tokenless has caused an uproar as investors face an -89% return on investment, questioning the project’s performance and management. Concerns arise over the concentration of token ownership within the team and the fate of unclaimed funds, leading to a lack of trust and transparency among the community. Description In a move that has sent shockwaves through the cryptocurrency community, the Parrot Protocol, a Solana-based liquidity network, has submitted a proposal that could have devastating consequences for its investors. The proposal calls for the redemption of its native PRT tokens for liquid treasury value and the transition to a no-token protocol. This decision has … Read more In a move that has sent shockwaves through the cryptocurrency community, the Parrot Protocol, a Solana-based liquidity network, has submitted a proposal that could have devastating consequences for its investors. The proposal calls for the redemption of its native PRT tokens for liquid treasury value and the transition to a no-token protocol. This decision has not been well-received by the community, with many investors expressing concerns about…

    Article 2023年7月23日

  • Crypto asset interest in Latvia slows amid market concerns: Latvia’s central bank report

    TL;DR Breakdown Latvian interest in crypto assets has seen a decline, as revealed by the Central Bank of Latvia, Latvijas Banka, due to concerns over fraud, insolvency, unwise investments, and increased regulation. Data shows a reduction in crypto asset purchases from 8% of the Latvian population in 2022 to 4% in early 2023, along with a decrease in transfers to crypto wallets from 51.8 million euros in 2022 to 10.7 million euros in Q1 2023. Despite lower levels of long-term savings and smaller retail crypto payments, crypto continues to dominate over traditional investments, signaling a shift in financial behavior and underscoring the impact of evolving market perceptions. Description In a recent study, the Central Bank of Latvia, Latvijas Banka, revealed that the country’s interest in crypto assets has been waning. The revelation, made in the 2023 “Financial Stability Report,” indicates that the crypto craze seems to be calming down within Latvia’s borders. It is important to know that the decline in interest has … Read more In a recent study, the Central Bank of Latvia, Latvijas Banka, revealed that the…

    Article 2023年8月6日

  • Here is how UK can actually tackle inflation

    TL;DR Breakdown UK can tackle inflation by adjusting monetary policy and potentially raising interest rates. Increase taxes for the better-off to drive out inflation. Advocate for a more balanced housing policy to stabilize the market. Address missed opportunities to invest in infrastructure during periods of low interest rates. Description Inflation, like an uninvited guest, is making itself felt in the UK, affecting everyday finances, right from interest rates to mortgage repayments. While this is a headache for most, for some, it’s business as usual. This uneven distribution of pain makes it clear that the current monetary policy isn’t doing enough to quickly combat inflation. … Read more Inflation, like an uninvited guest, is making itself felt in the UK, affecting everyday finances, right from interest rates to mortgage repayments. While this is a headache for most, for some, it’s business as usual. This uneven distribution of pain makes it clear that the current monetary policy isn’t doing enough to quickly combat inflation. Rebalancing housing policies A key area that’s been disproportionately affected is the housing market. It’s a market segment…

    Article 2023年7月10日

  • Venezuelan President calls for global de-dollarization amid BRICS summit

    TL;DR Breakdown Venezuelan President Nicolas Maduro calls for the de-dollarization of the global economy during the BRICS summit, advocating for alternative financial systems that use multiple national currencies. Maduro highlights the impact of U.S. sanctions on Venezuela and other countries, stating that at least 28% of the global population is affected by such “imperialist” measures. Despite Venezuela’s unsuccessful bid for BRICS membership, Maduro’s push for financial alternatives could align with BRICS countries’ own goals to reduce dollar dependence, potentially influencing future shifts in global financial systems. Description Venezuelan President Nicolas Maduro has urged for the de-dollarization of the global economy, citing the difficulties that the current dollar-dominated system imposes on emerging countries affected by U.S. sanctions. The call was made during Venezuela’s participation in the recent BRICS summit held in Johannesburg, South Africa. A push for financial independence Maduro’s message to the … Read more Venezuelan President Nicolas Maduro has urged for the de-dollarization of the global economy, citing the difficulties that the current dollar-dominated system imposes on emerging countries affected by U.S. sanctions. The call was made during Venezuela’s…

    Article 2023年8月29日

  • Mark Cuban criticizes the SEC for its unclear registration process

    TL;DR Breakdown Mark Cuban has called out the SEC for its unclear position in registering digital assets. SEC faces backlash over its handling of crypto firms. Renowned billionaire investor Mark Cuban recently joined a growing chorus of industry figures in expressing dissatisfaction with the United States Securities and Exchange Commission (SEC) over what he perceives as a lack of clear registration guidelines for cryptocurrency firms. Cuban took to Twitter to highlight the absence of a registration process within the SEC’s “Framework for ‘Investment Contract’ Analysis of Digital Assets” document, asserting that this absence makes it extremely challenging to determine what constitutes security in the crypto universe. Mark Cuban demands a step-by-step registration outline Mark Cuban emphasized that the document failed to provide a step-by-step outline for registration, making it difficult for companies to ascertain the criteria for compliance with federal securities laws. While the SEC document does touch upon the disclosure of relevant information to enable informed investment decisions and the significance of managerial efforts for enterprise success, it falls short of offering a comprehensive registration process. In contrast, Mark…

    Article 2023年6月15日
TOP