Kraken Changes Margin Trading Policies Following Australian Court Decision on Fiat Trading
Kraken has implemented significant changes to its margin trading services in Australia following a recent Federal Court decision. The court determined that offering margin in fiat currency to retail investors is subject to the Design and Distribution Obligations of the Corporations Act.
However, margin extensions in cryptocurrency are exempt from these regulations, allowing Kraken to offer margin trading services in cryptocurrency without restrictions.
In response to the ruling, Kraken has restricted its fiat margin trading services to wholesale clients only, affecting Australian retail investors who will need to qualify as wholesale investors under Australian laws to access fiat margin trading.
Kraken has expressed support for clearer regulations for cryptocurrencies in Australia, emphasizing the importance of a more relevant legal framework for digital assets.
Kraken’s Reaction to the Court Decision
Kraken’s swift response to the court decision demonstrates its commitment to operating within the regulatory frameworks of the countries it operates in. The exchange highlighted that while the court deemed its fiat margin product unlawful under the Corporations Act, the judgment also acknowledged deficiencies in current Australian cryptocurrency regulations.
This ruling has provided Kraken an opportunity to advocate for clear and comprehensive cryptocurrency regulations in Australia, specifically tailored to digital assets and offering guidance to companies and investors.
Although the ruling impacted fiat margin trading, Kraken’s cryptocurrency margin trading services remain unaffected, allowing clients in Australia to continue engaging in crypto pairs margin trading without new restrictions.
Crypto Exchange’s Plans for Fiat Margin Services
Kraken remains committed to expanding its fiat margin trading services for institutional clients and plans to introduce new avenues for more clients to access the fiat margin product in the future.
As the Australian government progresses in developing better crypto industry policies, Kraken continues to innovate and provide compliant products to maintain its market position.
By adapting to regulatory changes, Kraken demonstrates its responsibility and innovation, shaping the future of cryptocurrency trading in Australia.
Disclaimer
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