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

On 12 December 2024, the Federal Court of Australia imposed an AUD 8 million pecuniary penalty on Bit Trade Pty Ltd for contravening section 994B(2) of the Corporations Act 2001. The contravention involved Bit Trade making a margin extension product available to customers for purchasing cryptoassets on the Kraken exchange without making the required target market determination (TMD). A TMD outlines the class of retail clients targeted for a financial product and specifies any conditions or restrictions on its distribution. Under Australian law, financial product issuers must prepare an appropriate TMD and take reasonable steps to ensure the product is distributed in line with it. The Court found that Bit Trade's actions posed a significant financial risk, potentially resulting in customers losing more than their initial investments.