Kraken fined $5.1 million in Australia

The Federal Court of Australia has ordered Bit Trade, which manages the Australian division of the American centralized cryptocurrency exchange Kraken, to pay $5.1 million following a lawsuit from the Australian Securities and Investments Commission (ASIC).

The lawsuit against the exchange was filed in September of last year for violations related to the offering of a cryptocurrency trading product. Kraken breached the law by failing to define target markets for the product (TMD) — this procedure ensures that investors are not offered products that may harm them.

According to ASIC Chair Joe Longo, over 1,100 citizens utilized the product offered by Kraken Australia under Bit Trade, receiving more than $7 million in commission and interest while losing over $5 million, with 4 million attributed to a single investor. This marks the first case for the commission to hold a company accountable for failing to have a TMD, and cryptocurrency service providers need to remember their obligations for regulatory compliance.

Earlier, we reported that the cryptocurrency exchange Kraken is shutting down its own NFT trading platform two years after its launch.