U.S.-based cryptocurrency exchange Kraken has rolled out a new suite of crypto derivatives specifically tailored for Australian wholesale clients, aligning with local regulatory requirements following a recent legal setback in the country.
This launch underscores Kraken’s commitment to the Australian market and its aim to offer secure, compliant services for institutional investors amid evolving regulations. In a blog post published on Monday, Kraken highlighted its focus on providing advanced trading options for Australian clients.
Kraken’s latest derivatives products enable institutional clients to gain exposure to cryptocurrency price movements through futures derivatives, eliminating the need to hold the underlying assets. The service boasts multi-collateral support, allowing users to utilize collateral in fiat, stablecoins, and various cryptocurrencies. This is backed by a highly secure custodial system that covers over 200 tradable assets.
The introduction of these products comes on the heels of a ruling by Australia’s Federal Court against Kraken’s domestic entity, Bit Trade Pty Ltd., in August.
“Australian wholesale clients are looking for the ability to execute advanced trading strategies using a licensed broker backed by Kraken’s high security standards,” said Jonathon Miller, Kraken’s General Manager for Australia. “Our new premium product meets our clients’ trading needs and helps them to advance in their crypto journey.”
To qualify for Kraken’s derivatives products, individuals must possess net assets exceeding AUD $2.5 million (approximately USD $1.64 million) and have a gross annual income above AUD $250,000 (around USD $164,000) for the past two years. Eligible clients can begin exploring the new service on Kraken’s support page, while existing clients can confirm their eligibility through the Kraken Pro app.
Kraken has recently expressed concerns about the lack of regulatory clarity in Australia, particularly following the Federal Court ruling that affected its fiat margin trading product. The exchange pointed out that Australian crypto businesses and investors are navigating a “confusing and uncertain regulatory environment.”
“This ruling makes it clearer than ever that bespoke crypto regulation is urgently needed,” Kraken emphasized, noting that the decision highlights the broader issue of regulatory ambiguity in Australia’s approach to cryptocurrency.
The Australian Securities and Investments Commission (ASIC) previously filed civil proceedings against Bit Trade, accusing the subsidiary of failing to meet legal requirements such as conducting a target market determination before offering its margin trading product. The regulator noted that Bit Trade’s offering, which allowed Australians to receive an extension of 5x credit of the asset’s value, violated regulations by operating as a credit facility.
In its ruling, the Federal Court determined that Bit Trade had breached Australia’s Corporations Act section s994B(2) since October 2021.
Despite regulatory challenges, the crypto market in Australia has experienced significant growth, with a reported ownership rate of 17%, surpassing the global average of 15%. As the landscape evolves, Kraken’s new derivatives offering aims to address the needs of institutional investors looking to engage in the burgeoning cryptocurrency market.
As Kraken continues to adapt to the changing regulatory landscape, it remains focused on delivering innovative products and services to support its clients in Australia and beyond.
November 2024, Cryptoniteuae