(Reuters) – Australia’s corporate watchdog said on Thursday that the crypto exchange Kraken’s local operator has been ordered to pay an A$8 million ($5.1 million) fine for unlawfully issuing a credit facility to more than 1,100 customers in the country.

The Australian Securities and Investments Commission (ASIC) said that Bit Trade, which operates the Kraken exchange in Australia, failed to determine the right customers for a margin trading product, resulting in losses of more than $5 million.

The product provided for margin extensions, a form of credit or loan, to be made and repaid in either digital assets like bitcoin or national currencies such as U.S. dollars.

In August, the Federal Court of Australia found that the product was a credit facility, which requires a target market determination.

“Target market determinations are fundamental in ensuring that investors are not inappropriately marketed products that could harm them,” ASIC Chair Joe Longo said.

($1 = 1.5593 Australian dollars)

(Reporting by John Biju in Bengaluru; Editing by Sonia Cheema and Abinaya Vijayaraghavan)