The case arose because of a requirement under the "design and distribution" obligations applicable to regulated persons. This requirement has arisen recently in another case. At its simplest, what it says is that marketing must be designed for customers who have been identified as suitable.

Bit Trade created a "margin extension" product and traded it on the Kraken Exchange but it did not undertake a "target market determination" and marketed widely.

That's now, not news. What is news is the Judge's order that a margin extension in a national currency created a deferred debt which meant that the product was a credit facility but the obligation to repay a digital asset was not an obligation to repay money and was therefore not a deferred debt.

ASIC had argued "that the obligation to repay a digital asset or national currency was a deferred debt and accordingly, that the product was a credit facility."

The judge's ruling has the effect of determining that digital assets are not money. Cat meet pigeons.

The Court appears to accept that digital assets can give rise to "financial products" (jhence the finding of fault relating to the marketing) but as it's no money it's not a credit agreement.

It is a non-debt obligation it seems: " If Bit Trade is contractually obliged to accept cryptocurrency in satisfaction of that obligation, then it is difficult to see how that obligation would amount to a monetary obligation capable of constituting a debt because it would not require the payment of a sum of money. "

This creates far more problems than it solves. For example, how woud Bit Trade sue for the return when ithe asset is not a "thing?"

His Honour tried to differentiate between crypto and a foreign currency. It may well be that it would have provided a far less troublesome result if he had not done so and would have created a useful precedent.

The parties are to haggle out an agreed settlement over the lack of targeting. ASIC appears to think this is a win. It really isn't on any basis other than "yay, we got them for breaching a regulation no one thought applied until we decided it should."

Further reading: Judgment - https://download.asic.gov.au/media/ikmfvobk/24-186mr-asic-v-bit-trade-p…