- Kraken’s operator in Australia, Bit Trade, has been ordered to pay a fine of US$5.1 million for regulatory non-compliance
- The Australian Securities and Investments Commission accused the crypto platform of offering loans that breached regulations
Kraken’s Australian exchange operator, Bit Trade, has been fined A$8 million (approximately US$5.1 million) for failing to comply with Australian regulatory requirements. The Federal Court of Australia imposed the penalty after the Australian Securities and Investments Commission (ASIC) brought legal action. In its order, the court confirmed that Kraken’s Australian exchange operator must comply with the country’s crypto rules and directed the exchange to pay A$8 million as a penalty for local regulatory breaches. Notably, Kraken recently announced the launch of a licensed broker for Australian customers.
Bit Trade found non-compliant with regulations
In August, the court ruled in favour of ASIC. The regulator alleged that Bit Trade extended loans without the proper legal processes in place. ASIC argued that Bit Trade failed to identify a target market—a requirement designed to protect investors. Between October 2021 and August 2023, ASIC stated the firm offered margin extensions to around 1,100 users, resulting in losses exceeding A$5.2 million and occurring without appropriate legal safeguards.
ASIC sought a penalty of A$20 million. Bit Trade countered by proposing a maximum penalty of A$4 million. The court’s order requires Bit Trade, as Kraken’s Australian operator, to comply with the ruling within 60 days and to cover the commission’s legal costs related to the proceedings. The decision underscores growing regulatory scrutiny of crypto services operating in Australia and the importance of meeting local compliance obligations.
Kraken has faced regulatory challenges in other jurisdictions as well. In the United States, the Securities and Exchange Commission (SEC) filed charges against Kraken in early November 2023, alleging unregistered operations and the commingling of customer funds. The SEC’s claims included accusations that Kraken offered unregistered products and operated as an unregistered broker. In August 2024, a U.S. court denied Kraken’s motion to dismiss the SEC’s lawsuit, allowing that case to proceed.
These actions highlight the increasing enforcement focus on crypto firms around the world. Exchanges and brokerages are being held to traditional financial rules regarding registration, disclosure, consumer protections, and the proper handling of client funds. Operators expanding into regulated markets like Australia must ensure their products, marketing and risk controls meet local legal standards to avoid penalties and litigation.