“Today’s decision serves as a reminder to the crypto industry of the importance of compliance,” commented ASIC Deputy Chair Sarah Court on the ruling of Australia’s Federal Court. The regulator accused Kraken’s operator, Bit Trade Pty, of violating the requirements for the design and distribution of its margin trading product.

Bit Trade, a subsidiary of the American company Payward Incorporated, was held accountable for failing to make a target market determination for its product, despite warnings from the Australian Securities and Investments Commission (ASIC).

“We are disappointed by today’s decision, but we are prepared and willing to comply with it,” said a Kraken spokesperson in response to the case’s outcome.

ASIC and Bit Trade have seven days to agree on further actions, including possible penalties that the regulator intends to seek at a later stage.