The Australian regulator has issued a warning against crypto exchange Bitget for offering “unlicensed crypto futures products.” The Australian Securities and Investments Commission (ASIC) said Monday that Bitget has been offering crypto futures products with 125:1 leverage without obtaining an Australian Financial Services (AFS) license.
The product was advertised as “crypto futures trading,” luring Australians to download it via its website and mobile app.
“Bitget’s futures products are high-risk, derivative investments in which investors can speculate on future movements in cryptocurrency prices,” the ASIC noted.
ASIC Sets Maximum Limit of 2:1 Leverage for Crypto Instruments
The regulator stressed that it limits the leverage ratio for certain cryptocurrency derivative products to 2:1. However, Bitget touted that its unlicensed products could offer 125 times magnified gains or losses for investors.
“These products can be significantly leveraged,” said ASIC, adding that a small capital from investors is required to hold a sizable position in the underlying asset.
“Trading in highly leveraged derivative products can result in substantial losses for investors,” the agency warned.
Bitget is permitted to offer crypto exchange services in Australia; however, not licensed to carry any financial services businesses.
Last month, the exchange secured regulatory approval to operate in Georgia, to offer digital asset exchange and custodial wallet services. It became the second-largest crypto exchange by number of customers early this year, surpassing 100 million.
Bitget in Trouble With At Least Eight Regulators
The exchange’s products have received similar warnings from several regulators worldwide. Last year, Germany’s BaFin warned investors not to engage with Bitget as the regulator does not supervise the entity.
Further, Canada, France, Cyprus, Malaysia, Spain and Japan have released statements regarding Bitget’s unlicensed crypto offerings.
Before the ASIC’s warning, the exchange has added consumer warning disclaimers noting that it is not licensed or authorised to offer such products in Australia.
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