Canberra, Wednesday, September 18, 2024 – Kraken cryptocurrency exchange has modified its margin trading product in response to a recent ruling by the Australian Federal Court, reports said.
The court determined that fiat currency margin extensions are subject to Australia’s regulatory framework, while margin extensions in cryptocurrency are not.
This ruling impacts Kraken’s operations, leading the exchange to restrict fiat margin trading to wholesale investors, while leaving crypto margin trading unaffected.
The court found that fiat margin extensions must comply with the Design and Distribution Obligations (DDO) under the Corporations Act, but this does not apply to crypto margin extensions. Kraken acknowledged the decision but expressed concern over the lack of clear crypto regulations in Australia. The exchange emphasized the ruling as a win for advocates of tailored crypto laws, highlighting that existing legislation is inadequate for the evolving crypto industry.
In compliance with the ruling, Kraken has restricted fiat margin trading for Australian retail clients, limiting it to wholesale investors.
However, cryptocurrency margin trading remains unrestricted. Kraken reaffirmed its commitment to regulatory compliance and called for clearer, more specific regulations to better govern the crypto sector in Australia.
The company stressed that the current regulatory uncertainty hampers innovation and leaves investors navigating unclear legal frameworks, further underscoring the need for updated crypto legislation.
