Australia: Issued ruling in public lawsuit against Bit Trade by ASIC for alleged design and distribution failures

On 23 August 2024, the Australian Securities and Investments Commission (ASIC) announced a Federal Court had ruled in their favor in the public lawsuit filed against Bit Trade on 21 September 2023. Bit Trade is the Australian provider of the Kraken cryptocurrency exchange. The Court found that Bit Trade failed to comply with design and distribution obligations for its margin trading product offered on the Kraken exchange. Specifically, the case focused on Bit Trade's failure to establish a target market determination - a document describing a product's target market and its distribution conditions - for the product before offering it to Australian customers, as required by law. The product in question is a so-called margin trading product which offers customers credit for crypto asset trading on Kraken. The judgement finds the obligation to repay a digital asset was not an obligation to repay money and was therefore not a deferred debt. ASIC and Bit Trade have been given seven days to agree on declarations and injunctions. ASIC has announced it will seek financial penalties against Bit Trade on a date to be set.