Australian Regulator Pushes for Crypto Firms to Be Licensed Under Corporations Act

• Australia’s financial regulator is moving towards requiring crypto firms, beyond just exchanges, to be licensed under the country’s corporations law.
• The Australian Securities and Investments Commission (ASIC) will issue an update to “Information Paper 225” by November to clarify regulations for crypto assets.
• ASIC Commissioner Alan Kirkland noted that most major crypto assets should fall under the Corporations Act’s purview.

Australia is tightening its regulatory landscape for crypto firms with new licensing requirements, aiming to safeguard consumers and bring clarity to the market.

Aussie Regulator Highlights Need for Comprehensive Crypto Licensing

ASIC, Australia’s key financial watchdog, has announced forthcoming changes to its regulatory framework, emphasizing the need for crypto firms to be licensed under the Corporations Act. The move is part of a broader effort to enhance consumer protection and market stability amid growing concerns over crypto-related risks. This update will soon be reflected in the revised “Information Paper 225,” slated for release by November.

Australian Treasury Weighs In

The Australian Treasury has also been active in this regulatory space. Last year, it proposed that crypto exchanges holding significant assets should obtain an Australian Financial Services Licence. Although an exposure draft was initially expected within the year, political uncertainties have delayed its introduction. The Treasury’s stance underscores the critical need to regulate crypto platforms to mitigate potential risks and failures.

The Added Vigilance of Australian Authorities

ASIC has been increasingly vigilant about the risks posed by crypto assets. Between July 2023 and now, the regulator has dismantled over 7,300 scam websites, with 615 specifically related to cryptocurrency. This heightened enforcement activity coincides with broader concerns about consumer safety, as evidenced by the Australian Competition and Consumer Commission’s findings that more than half of crypto-related advertisements on Facebook were scams or violated Meta’s advertising policies.

Conclusion

In summary, Australia’s enhanced focus on crypto regulations signifies a pivotal shift towards bolstering consumer protection and market integrity. By requiring comprehensive licensing and clarifying existing laws, Australian authorities aim to navigate the delicate balance of fostering innovation while mitigating risk. As the regulatory landscape evolves, crypto firms operating in Australia must stay vigilant and compliant to thrive in this increasingly scrutinized environment.