1. Crypto Regulation Requirements
2. Changes in Kraken’s Platform
3. International Examples of Crypto Regulation

In August, Kraken faced regulatory challenges in Australia after a court ruling declared its fiat margin trading product illegal for retail investors.

Crypto Regulation Requirements

The court ruling found Kraken in breach of the Corporations Act’s Design and Distribution Obligations (DDO) by offering its fiat margin trading product to retail investors. However, the decision did not apply to cryptocurrency margin trading, creating a legal grey area. The Australian Securities and Investment Commission (ASIC) welcomed the decision, stating that Kraken had violated regulations. Kraken noted the need for clear crypto asset regulations.

Changes in Kraken’s Platform

Following the court ruling, Kraken modified its platform to allow fiat margin trading only for wholesale investors under the Corporations Act. Cryptocurrency margin trading remains available for all users as it is not yet similarly regulated. Kraken assured compliance with local and international laws and is considering other options for expanding fiat margin trading services.

International Examples of Crypto Regulation

Kraken is not alone in facing regulatory issues. In 2020, the U.S. Securities and Exchange Commission (SEC) accused Kraken of operating an unregistered securities exchange. Countries like the US, UK, and Singapore are advancing in crafting specific laws for the crypto industry. For example, in Australia, Monochrome Asset Management is seeking approval to launch an Ethereum ETF on the Cboe Australia exchange, indicating a growing demand for regulated crypto products.

The situation highlights the need for clear and comprehensive crypto regulations both in Australia and globally. Regulators must balance investor protection and fostering innovation.