The Federal Court of Australia ruled that Bit Trade, the operating firm of Kraken crypto exchange in the country, must pay eight million Australian dollars ($5.1 million) for failing to comply with regulatory obligations.

This penalty follows the August court ruling in favor of the Australian Securities and Investments Commission (ASIC) in its civil proceedings against Bit Trade, where the regulator accused the company of issuing a credit facility without a license. 

In detail, ASIC said that Bit Trade failed to make the target market determination before offering its margin extension product to over 1,100 customers between October 2021 and August 2023, which led to losses of more than $5.2 million.

ASIC originally had asked for an A$20 million penalty on Bit Trade, while the company argued that it should not exceed A$4 million.

“We appreciate [that] the Court recognized our compliance efforts, but are disappointed with the outcome of this case,” a Kraken spokesperson told The Block. “We believe this case highlights the urgent need for bespoke crypto legislation to address the shortcomings that are causing confusion and uncertainty for Australian crypto investors and businesses.”

In response to the initial court ruling in August, Kraken noted that the judgment reflects the lack of clarity in Australia’s crypto regulations. On the other hand, ASIC Deputy Chair Sarah Court said that the regulator will continue to scrutinize crypto products to ensure regulatory compliance for the protection of investors.

The court ordered Bit Trade to pay the fine within 60 days and cover ASIC’s legal proceedings' costs.

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