Australia is preparing to implement new regulations that require the crypto industry to obtain financial services licenses under the Corporations Act.
Alan Kirkland, the Australian Securities and Investments Commission commissioner, stated at the AFR Digital Assets Summit on Monday that many crypto-asset firms in Australia will require licensing. He asserted that ASIC regards numerous crypto assets as financial products by current legislation.
ASIC’s regulatory framework concentrates on “financial products,” encompassing non-cash transactions, risk management, and financial investments. Nevertheless, this model is only partially consistent with certain aspects of cryptocurrency.
This generates uncertainty regarding whether specific cryptographic structures necessitate licensing.
Kirkland confirmed that ASIC will release new draft guidance shortly and solicit industry feedback on these updates.
“ASIC is committed to ensuring that the current regulatory framework’s critical consumer protections are available to the millions of Australians who currently hold crypto-asset investments,” he stated.
Australia to Clarify Token Rules in Response to Regulatory Concerns, Crypto Developers Bypass Licensing
Numerous cryptocurrency developers have refrained from obtaining Australian Financial Services Licenses (AFSLs) following legal advice. AFR reported that this decision is predicated on the conviction that their investment products are not subject to current laws.
To resolve this issue, ASIC intends to revise its guidance by November. This will elucidate the classification and treatment of specific crypto tokens representing digital ownership rights and related products.
Additionally, Kirkland acknowledged ASIC’s apprehension regarding potential market misconduct and consumer harm. He asserted that licensing will mitigate risks, foster consumer confidence, and safeguard market integrity.
ASIC Enhances Crypto Oversight
ASIC has increased its enforcement efforts, focusing more intensely on the crypto sector. The agency recently accused Kraken of failing to adequately inform its Australian clients about the dangers of margin trading, which led to substantial financial losses for customers.
Furthermore, in August, ASIC initiated legal proceedings against ASX, accusing the market operator of mismanaging the blockchain-based CHESS replacement project.
