Kraken’s Australian entity, Bit Trade, is facing a multi-million fine for failing to comply with rules requiring a target market determination for its margin extension product.

The Australian operator of the Kraken crypto exchange, Bit Trade, has been fined AUD 8 million (around $5.2 million) for unlawfully issuing a credit facility to more than 1,100 customers, the Australian Securities and Investments Commission said in a Thursday press release, Dec. 12.

The Federal Court ruled that the company failed to follow Australian laws requiring financial products to have a target market determination to ensure they are sold to the right customers.

From October 2021, Bit Trade offered a margin extension product that “provided for margin extensions to be made and repaid in either digital assets like Bitcoin (BTC) or national currencies such as U.S. dollars,” the regulator says. However, the product was marketed without a required target market determination, a key regulatory document meant to ensure financial products are offered only to suitable customers.

The court found Bit Trade’s product breached design and distribution obligations requirements every time it was issued without a target market determination. Customers were charged fees and interest exceeding $7 million, with trading losses surpassing $5 million, the regulator claims.

One investor reportedly lost nearly $4 million using the margin extension product. Justice Nicholas, in his ruling, described Bit Trade’s actions as “serious and motivated by a desire to maximize revenue,” adding that the company failed to address compliance requirements until flagged by ASIC.

Commenting on the ruling, ASIC Chair Joe Longo called it a “significant outcome,” adding that “it is ASIC’s first penalty against an entity for failing to have a TMD and a reminder for digital assets firms to consider their regulatory compliance obligations.” In addition to the fine, Bit Trade was ordered to cover ASIC’s legal costs.

Hut 8 has announced an upgrade to its ASIC fleet with the purchase of 31,145 Antminer S21+ units at $15 per terahash.

North American cryptocurrency mining giant Hut 8 has unveiled plans to upgrade its ASIC fleet with the purchase of 31,145 Bitmain Antminer S21+ miners.

In a Nov. 6 press release, the Miami-headquartered mining company stated that under the purchase agreement, it will acquire the miners at $15.00 per terahash, with delivery expected in early 2025. This upgrade is set to add 3.7 exahashes per second to Hut 8’s self-mining capacity, boosting it to approximately 9.3 EH/s, a 66% increase from current levels.

The new units are expected to enhance fleet efficiency by 37%, lowering average energy consumption per terahash from 31.7 to 19.9 joules, according to the press release.

Hut 8 upgrades mining fleet

Alongside an existing option to purchase an additional 15 EH/s of Bitmain miners at its Vega site, Hut 8 stated its goal to reach around 24 EH/s in self-mining hashrate and 15.7 J/TH in fleet efficiency by mid-2025.

Hut 8 chief executive Asher Genoot noted that the S21+ offers a “faster payback period than more efficient models across a wide band of future hashprice scenarios,” adding that these machines could help the company optimize investment returns. Following the news, Hut 8 shares rose nearly 7.6% to $16.74, according to data from Nasdaq.

The upgrade comes just a few months after Hut 8 expanded its partnership with Bitmain, revealing the upcoming launch of the U3S21EXPH, a next-generation ASIC miner capable of reaching up to 860 TH/s. Scheduled for deployment in Q2 2025, the miner is the first mass-commercialized ASIC model to feature direct liquid-to-chip cooling in a U-form factor.