Kraken Boosts Australia Presence after Setback: Launches Derivatives Trading

Kraken, which previously violated Australian financial market rules by offering fiat-based margin products, has revamped its services in the country by offering crypto-based derivatives products for local wholesale clients.

Limited to Wholesale Clients

Announced yesterday (Sunday), the American exchange highlighted that the new products are being offered under its local entity, an Australian financial services-licensed broker. The derivative products are available only to eligible Australian wholesale clients.

The exchange noted that qualified clients will have access to over 200 tradable assets. The derivatives platform will also offer multi-collateral support with fiat, stablecoins, and cryptocurrencies.

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

“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 GM for Australia and Rest of World.

Breached Aussie Rules

Headquartered in California, Kraken faced a setback in Australia when the local regulator alleged that the crypto exchange violated regulations by offering margin trading products. Although Kraken called the action “surprising and disappointing,” an Australian court sided with the regulator, ruling that the exchange had indeed violated local rules. However, the court order specified that only Kraken's fiat-based margin products breached regulations, not the crypto-based products.

Notably, the breaches were specifically related to products offered to Kraken's retail client base, not to wholesale clients.

Kraken continued to expand its presence in Australia by bringing custody services to institutional clients in the country, as well as in the United Kingdom.

“Our licensed broker offering is a testament to our ongoing commitment to regulatory compliance and to bringing exciting crypto products to market,” Miller added, “that can truly meet institutional demand for crypto assets.”

Last month, the American exchange also announced the launch of its new global derivatives venue regulated by the Bermuda Monetary Authority. It expanded its presence in Europe with the acquisition of Dutch crypto broker BCM.

Meanwhile, Kraken is contesting actions by the US Securities and Exchange Commission, which accused the exchange of operating an unregistered securities exchange, broker, dealer, and clearing agency. Furthermore, the exchange was accused of commingling customers’ money and crypto assets with its own. Kraken recently responded to the regulator, arguing that crypto assets are not “illegal securities” and seeking a jury trial.