An important ruling was made against Bit Trade, which is the Australian branch of Kraken’s bitcoin market. The court said Bit Trade didn’t do important things like design and marketing, and it also looked like an illegal credit facility.
The Australian Securities and Investments Commission (ASIC) sued Bit Trade in September 2023. ASIC said Bit Trade started its credit trade product without following the law in Australia about who the product is meant for. The court agreed that Bit Trade broke the rules by not making this basic choice before putting the goods on the market.
Australia’s job is to make sure that financial products are made and sold in a way that meets the wants of certain groups of users. It was also said by ASIC that Bit Trade’s product, which let users trade with up to five times the value of their protection, was an illegal way to lend money. The court agreed because the product gave buyers a “deferred debt,” which is what the law calls a credit facility.
The judge will give ASIC and Bit Trade one week to talk about the terms of the orders and comments. Bit Trade has been warned by ASIC that it will be sued for the breaches.
The Australian crypto business has been given a sharp warning about how important it is to follow the rules and make sure goods are sent out properly by this decision. The business said it is ready to do what the court says, even though it doesn’t like it.
