Australian court fines Kraken operator $5.1 million

Australia‘s Federal Court has fined Bit Trade, the local operator of cryptocurrency exchange Kraken, A$8 million ($5.1 million) for unlawfully offering credit facilities to over 1,100 customers. The ruling came after the Australian Securities and Investments Commission (ASIC) filed civil proceedings against the company, accusing it of non-compliance with regulations for its margin trading product.

ASIC revealed that Bit Trade failed to assess whether its margin extensions—a form of credit repayable in digital assets like bitcoin or national currencies—were suitable for customers. This led to combined customer losses exceeding $5 million, while Bit Trade charged over $7 million in fees and interest. The court classified the margin extension product as a credit facility requiring a specific consumer suitability document, which the company had not provided.

In a statement, Kraken expressed disappointment, arguing the ruling could stifle economic growth in Australia. The exchange emphasised its willingness to work with regulators to shape the evolving cryptocurrency framework. The case marks a milestone for ASIC, as it is the first penalty imposed on a company for failing to provide a target market determination for a financial product.