Earlier this year, the Federal Court found that Bit Trade Pty Ltd’s margin extension product was a product for which it needed to prepare a target market determination (TMD) prior to making the product available.
The Court found in that decision that by failing to prepare a TMD it had breached the design and distribution obligations in the Corporations Act each time it offered the fiat currency component of the margin extension product without having made a TMD.
Last week the Court found that Bit Trade’s failures were “serious and motivated by a desire to maximise revenue”. The Court issued a penalty of $8 million and ordered that Bit Trade pay the regulator’s costs.
Bit Trade is part of the global Payward Group that operates the Kraken cryptocurrency exchange.
The judgment is available here.
Karen Petch acted for the Australian Securities and Investments Commission, led by Jeremy Giles SC. James Arnott SC and Amy Campbell acted for Bit Trade, instructed by Gilbert + Tobin.
