Kraken has made some significant changes to the margin trading services in Australia after a recent Federal Court decision. The court concluded that offering the margin in fiat currency to retail investors is governed by the Design and Distribution Obligations of the Corporations Act.
Nevertheless, the margin extensions in the cryptocurrency remain the exceptions to these regulations. Thus enabling Kraken to provide margin trading services in cryptocurrency without any limitations.
In response to the decision, Kraken has limited its fiat margin trading services only to wholesale clients. This decision impacts Australian retail investors as they will be barred from accessing fiat margin trading. That is except if they qualify as wholesale investors under Australian laws.
Kraken stated its support for the establishment of clearer rules for cryptocurrencies in Australia. It emphasized the need for a more relevant legal framework for digital assets.
Kraken’s Reaction to the Court Decision
Kraken’s quick response to the court ruling shows it is keen on operating within respective legal frameworks of the countries it serves. The exchange pointed out that while the court ruled that Kraken’s fiat margin product was unlawful under the Corporations Act, the judgment also discussed the shortcomings of the current Australian legal framework in regulating cryptocurrencies.
This decision has now given Kraken a chance to call for proper and clear cryptocurrency regulations in Australia. It further urged for regulation, especially one that is specific to the nature of digital assets and offers more direction to companies and investors.
While the ruling affected the fiat margin trading, the cryptocurrency margin trading services of Kraken are not affected. Clients will still be able to engage in crypto pairs margin trading with no new regulation which means that trading will remain open to users in Australia.
Crypto Exchange’s Plans for Fiat Margin Services
Kraken however has not relented in its efforts to offer more fiat margin trading services to its institutional clients. It also revealed that the company plans on opening up other ways through which more clients can get a chance to trade the fiat margin product in the coming months.
Kraken noted that it will keep innovating and providing its customers with products that are compliant. As the Australian government continues the process of developing better policies for the crypto industry, the company continues to take the initiative to hold its position in the market.
These measures that Kraken has taken to conform to the changes point towards the exchange’s responsibility and innovation. In providing compliant services and demanding better rules, Kraken still defines the future of cryptocurrency trading in Australia.
