Australia’s corporate regulator announced on Thursday that Kraken’s local operator has been fined A$8 million (approximately $5.1 million USD) for illegally offering a credit facility to over 1,100 customers in the country.
The Australian Securities and Investments Commission (ASIC) stated that Bit Trade, the operator of Kraken in Australia, failed to properly assess the suitability of customers for a margin trading product, leading to losses exceeding $5 million.
The margin trading product allowed for credit or loan extensions to be issued and repaid using either digital assets like Bitcoin or fiat currencies such as the U.S. dollar.
In August, the Federal Court of Australia determined that the product qualified as a credit facility, which requires a target market determination.
“Target market determinations are critical in ensuring that investors are not offered inappropriate products that could cause harm,” said ASIC Chair Joe Longo.
(Exchange rate: $1 USD = 1.5593 AUD).
