Kraken Expands Derivative Products to Australian Customers
U.S.-based cryptocurrency exchange Kraken has introduced a package of crypto derivatives directed at its Australian wholesale customers. This move is strategic after a decision by the Federal Court recently involved its margin trading in the country. Kraken wants to offer the new products while still standing in a compliant position as anticipated by regulators; this, again, outlines them commitment to bringing compliant services to institutional investors.
Kraken’s Derivative Suite: Institutional Investor Benefits
Kraken’s new derivatives suite gives institutional clients exposure to price fluctuations in cryptocurrency via a futures derivative-one that doesn’t require taking possession of the actual underlying. The nature of this feature reflects a need coming from high-net-worth individuals and institutional investors in Australia’s evolving crypto market.
Multi-Collateral Support Enhances Flexibility
Kraken’s offering includes a multi-collateral that will involve the use of multiple forms of collateral, like fiat, stablecoins, and cryptocurrencies. Flexibility like this would, therefore, provide room for Australian clients to trade more than 200 assets on the back of secure custodial infrastructure that would meet advanced traders’ needs.
Australian wholesale clients are demanding the ability to trade more sophisticated options with a licensed broker underpinned by the security standards that Kraken upholds,” said Jonathon Miller, General Manager of them in Australia. “This premium product meets the demand of our clients and progresses their crypto journey with Kraken”.
Eligibility Criteria of Kraken’s Derivative Products
To be eligible, Australian residents will have to demonstrate net assets of more than AUD $2.5 million (USD $1.64 million) and annual income above AUD $250,000 (USD $164,000) for the last two years. Eligible clients can access the new product suite through them support page or check eligibility through the Kraken Pro app.
Regulatory Concerns and the Need for Clarity
The recent legal hurdles with them highlight the more profound regulatory problems at the heart of Australia’s crypto ecosystem. Following the Federal Court ruling against the them subsidiary, Bit Trade Pty Ltd, the exchange went so far as to express its concern over Australia’s “confusing and uncertain regulatory environment.” The key takeaway from Kraken’s stance is that the recent ruling further underscores the dire need for proper crypto-specific legislation, in whose absence growth cannot really be expected to be sustainable.
Background of the Legal Dispute between Bit Trade and ASIC
ASIC initiated civil proceedings against Bit Trade last year on grounds it had failed to meet the target market determination obligations for margin trading. ASIC argued Bit Trade’s product, which provided clients with credit of 5x against asset value, was an illicit, unauthorized credit arrangement. In August, the Federal Court ruled Bit Trade had breached the Corporations Act; the determination has been considered somewhat of a milestone for crypto regulation in Australia.
Growth and Future of Crypto Market in Australia
The crypto adoption in Australia has been strong, with ownership rates as high as 17% above the global average of 15%. This new derivatives suite represents Kraken’s confidence in the long-term potential of the market, as well as its commitment to increasing options for institutional clients in Australia. As regulatory pressure continues to mount, Kraken stays attentive to ensuring compliant, secure, and versatile trading solutions for its clients.
Kraken’s entrance into the derivatives space may be what finally changes Australia’s crypto sector for good, where investors are looking to seek more clarity and security in various trading options within its complex regulatory landscape.
