Kraken Launches Derivatives for Australian Wholesale Clients After Regulatory Setback

U.S.-based crypto exchange Kraken has launched a new suite of crypto derivatives products for Australian wholesale clients, aimed at aligning with regulatory standards following a recent legal challenge in the country.

Kraken’s licensed broker offering will allow institutional clients to gain exposure to crypto price movements through derivatives without directly holding the underlying assets, the company said Sunday. 

The service includes multi-collateral support—fiat, stablecoins, and crypto—held within what Kraken describes as “one of the most robust custodial solutions,” available for over 200 tradable assets.

Kraken said it remains committed to maintaining a foothold in the Australian market while catering to institutional demand amid an evolving regulatory landscape.

Its launch comes months after Kraken’s domestic operator, Bit Trade Pty Ltd, lost a court case with Australia’s financial regulator, the Australian Securities and Investments Commission. 

In August, Australia’s Federal Court ruled that Bit Trade failed to meet the required standards for its margin trading product by not providing a target market determination, a requirement under Australia’s Corporations Act.

The ruling underscored the need for crypto products to meet stringent compliance measures to avoid potential consumer risks.

Now, as the company attempts to shake off that legal hurdle, its next challenge lies in differentiating itself from rival exchanges offering similar products, including Swyftx and OKX.

In any case, Kraken’s General Manager for Australia, Jonathon Miller, said the derivatives broker offering is a response to increasing demand from institutional clients for compliant, high-security trading options. 

To qualify, an individual’s net assets must exceed $2.5 million (US$1.64 million) with a gross annual income exceeding $250,000 (US$164,000) for the last two financial years.

“Australian wholesale clients are looking for the ability to execute advanced trading strategies using a licensed broker backed by Kraken’s high-security standards,” Miller said in a statement.

Wholesale clients can begin exploring the new offering via Kraken’s support page, and existing clients can confirm their eligibility through the Kraken Pro app.