U.S.-based cryptocurrency exchange Kraken has introduced a new suite of crypto derivatives tailored for Australian wholesale clients, designed to align with regulatory requirements after facing a recent legal setback in the country.
The launch reflects Kraken’s commitment to the Australian market and its efforts to provide secure and compliant services for institutional investors amid a changing regulatory landscape, the exchange said in a Monday blog post.
Kraken’s new derivatives offering enables institutional clients to gain exposure to cryptocurrency price movements through futures derivatives without the need to hold the underlying assets.
Kraken’s New Derivatives Product Include Multi-Collateral Support
The service includes multi-collateral support—allowing for collateral in fiat, stablecoins, and crypto—within a highly secure custodial system covering over 200 tradable assets.
The launch follows a ruling by Australia’s Federal Court in August against Kraken’s domestic entity, Bit Trade Pty Ltd.
“Australian wholesale clients are looking for the ability to execute advanced trading strategies using a licensed broker backed by Kraken’s high security standards,” Jonathon Miller, Kraken’s General Manager for Australia, said,
“Our new premium product meets our clients’ trading needs and helps them to advance in their crypto journey.”
Hey Australia
– big news!
We are now offering access to crypto-based derivatives for eligible wholesale clients via our Australian financial services licensed broker.
Read more here:https://t.co/beFhgGaGGm pic.twitter.com/wl1jbfMVjE— Kraken Exchange (@krakenfx) November 3, 2024
To qualify for Kraken’s derivatives products, individuals must have net assets exceeding AUD $2.5 million (USD $1.64 million) and a gross annual income above AUD $250,000 (USD $164,000) for the past two years.
Eligible clients can begin exploring the new service on Kraken’s support page, with existing clients able to confirm eligibility through the Kraken Pro app.
Kraken Raises Concern About Lack of Regulatory in Australia
Just recently, Kraken raised concerns about the lack of regulatory clarity in Australia following a Federal Court ruling against its fiat margin trading product.
The exchange said that Australian crypto businesses and investors continue to operate in a “confusing and uncertain regulatory environment.”
The exchange emphasized that the court’s decision underscores the broader issue of regulatory ambiguity in the country’s approach to cryptocurrency.
“This ruling makes it clearer than ever that bespoke crypto regulation is urgently needed.”
Last year, the Australian Securities and Investments Commission (ASIC) filed civil proceedings against Bit Trade, a subsidiary of Kraken’s parent company, Payward Incorporated.
ASIC accused Bit Trade of failing to meet legal requirements, such as conducting a target market determination, before offering its margin trading product to customers.
The regulator also stressed that since Bit Trade’s product allowed Australians to receive an extension of 5x credit of the asset’s value, it violated regulations by operating as a credit facility.
The Federal Court ruled against Bit Trade in late August.
In its ruling, the court said the platform had breached the country’s Corporations Act section s994B(2) since October 2021.
The crypto market in Australia has seen significant growth over the past few years in terms of ownership and adoption.
As reported, the crypto ownership rate in Australia is 17%, which is higher than the global average of 15%.
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