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Giant crypto exchange Kraken has just launched a new suite of crypto derivatives for wholesale clients in Australia. The new product is designed to follow regulatory requirements after Kraken faced a recent legal setback in the country.
In a Monday blog post, the exchange said that the launch reflects Kraken’s commitment to the Australian market and its effort to provide secure and compliant services for institutional investors amid a developing regulatory landscape.
“Australia has long been a cornerstone of our global operation. Our licensed broker offering is testament to our ongoing commitment to regulatory compliance and to bringing exciting crypto products to market that can truly unlock institutional demand for crypto assets,” said Jonathan Miller, Kraken GM for Australia and Rest of World.
Kraken’s New Derivatives Product Include Muti-Collateral Support
Kraken’s new service offers multi-collateral support, allowing users to use fiat, stablecoins, and cryptocurrencies as collateral within a secure custodial system that encompasses over 200 tradable assets.
This launch follows an August ruling by Australia’s Federal Court against Kraken’s local entity, Bit Trade Pty Ltd.
“Australian wholesale clients are seeking advanced trading strategies through a licensed broker that adheres to Kraken’s high security standards,” Miller stated. “Our new premium product addresses our clients’ trading requirements and supports their progression in the crypto landscape.”
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 access Kraken’s derivatives products, individuals need to have net assets over AUD $2.5 million (USD $1.64 million) and a gross annual income exceeding AUD $250,000 (USD $164,000) for the last two years.
Eligible clients can start exploring the new service on Kraken’s support page, while existing clients can verify their eligibility through the Kraken Pro app.
Kraken Expresses Concerns Over Regulatory Ambiguity in Australia
Recently, Kraken voiced concerns about the lack of regulatory clarity in Australia following the Federal Court’s ruling against its fiat margin trading product.
The exchange highlighted that Australian crypto businesses and investors are navigating a “confusing and uncertain regulatory environment.”
Kraken stressed that the court’s decision reflects a broader issue of regulatory uncertainty regarding cryptocurrency in the country. “This ruling emphasises the urgent need for tailored crypto regulation.”
Last year, the Australian Securities and Investments Commission (ASIC) initiated civil proceedings against Bit Trade, a subsidiary of Kraken’s parent company, Payward Incorporated.
ASIC accused Bit Trade of not meeting legal obligations, such as performing a target market determination, before offering its margin trading product to customers.
The regulator noted that since Bit Trade’s product allowed Australians to access 5x credit of the asset’s value, it was operating as an unauthorised credit facility.
In late August, the Federal Court ruled against Bit Trade, stating that the platform violated the country’s Corporations Act section s994B(2) since October 2021.
The Australian crypto market has experienced significant growth in ownership and adoption over the past few years, with a reported crypto ownership rate of 17%, surpassing the global average of 15%.