Australia’s financial regulator, the Australian Securities and Investments Commission (ASIC), has formally admonished the crypto exchange Bitget for allegedly advertising high-risk derivatives with excessive leverage to Australian users without holding the required Australian Financial Services (AFS) licence. The warning is a significant move to protect Australian investors from potentially devastating losses associated with unlicensed investment products.
### ASIC’s Warning on Bitget
ASIC highlighted that Bitget had promoted derivatives offering leverage as high as 125 times. This far exceeds the maximum leverage limit of 2:1 enforced in Australia. These financial products were made available through the Bitget mobile app and website, under the guise of “crypto futures trading.”
The regulatory authority underscored the speculative nature of these offerings, which are highly risky due to their potential for large losses that can outweigh initial capital investments. ASIC articulated concerns that investors engaging with unlicensed products are stripped of essential rights and protections provided under Australian financial services legislation. Such protections include access to internal dispute resolution processes and safeguards for client funds, which are crucial in situations where investments go awry.
### Bitget’s Global Regulatory Challenges
Bitget, one of the largest cryptocurrency exchanges globally with approximately 100 million users, has a significant presence in Australia. However, while it is registered to facilitate crypto exchange services in the country, it is not authorised to promote or offer financial instruments like derivatives. In response to ASIC’s warning, Bitget has added a disclaimer that acknowledges the lack of local licensing for its derivatives.
The firm is not only facing scrutiny in Australia; it has encountered similar regulatory challenges in various jurisdictions worldwide. Countries including Germany, Canada, France, Cyprus, Malaysia, Spain, and Japan have issued warnings about Bitget’s unauthorised crypto products, indicating a widespread concern among regulators regarding the operational practices of the exchange.
### Summary
In summary, ASIC’s warning serves as a stark reminder of the regulatory landscape surrounding cryptocurrency exchanges and investment products in Australia. With high-risk derivatives being offered without the necessary licencing, Australian investors are urged to exercise caution and remain informed about the protections available to them under local laws. As Bitget faces increasing regulatory scrutiny across multiple countries, the situation reflects ongoing tensions between innovation in the crypto space and the need for robust regulatory frameworks to protect investors.
