Virtual asset service providers (VASPs) in Australia will have to obtain financial services licenses under a new regulatory regime that some in the sector have criticized as ‘ambiguous.’
Australian exchanges have operated under a specialized regime for the industry, but the Australian Securities and Investments Commission (ASIC) plans to extend the framework to regard them as financial institutions.
Speaking at a recent digital assets event, ASIC Commissioner Alan Kirkland said that the commission believes the country’s Corporations Act covers most major digital assets. This necessitates the inclusion of the exchanges that facilitate their trading under this Act.
“ASIC’s message is that a significant number of crypto-asset firms in the Australian market are likely to need a license under the current law,” Kirkland told one media outlet.
The commissioner added that he believes there’s a need for a balance between protecting investors and promoting innovation. Australia has come under the spotlight in recent years for some massive digital asset scams, drawing criticism on ASIC and its lax measures. FTX, for instance, claimed to be registered to offer digital asset services by the commission, but when it collapsed, it emerged that its ‘crypto’ business was not licensed.
Blowups like FTX have pushed ASIC to be stringent, with Commissioner Kirkland stating, “ASIC believes that licensing and its subsequent protections will mitigate risk while bolstering consumer confidence and market integrity — two elements that are crucial in encouraging innovation in the financial system.”
However, some legislators and industry stakeholders believe ASIC may be overcorrecting and strangling the burgeoning sector.
Caroline Bowler, the CEO of Australia’s oldest ‘crypto’ exchange, BTC Markets, opined that the upcoming rules over which activities will require a license are unclear, adding to the existing confusion for VASPs.
“It’s super broad, the ambiguity in the language if anything just creates more questions than it provides,” she told one media outlet.
Senator Andrew Bragg has also slammed the new regulatory stance, which he claims has pushed Australia “from crypto leader to crypto laggard.”
The opposition legislator blamed the ruling Labour Party for abandoning its campaign pledges, where it promised to issue enabling regulations for the industry. This, he said, has denied the country the opportunity to leverage exciting trends like tokenization, which could transform the country’s real estate market.
“By locking Australia in the crypto slow lane, Labor has stifled innovation and denied Australians the opportunities to reap the benefits that blockchain provides.”
Turkey suspends digital asset taxation plans
In Turkey, the government has shelved plans to tax income from digital assets and stocks that sparked an uproar among investors.
Vice President Cevdet Yilmaz told Bloomberg that the government’s focus now is on “narrowing the tax exemptions.”
“We don’t have a stocks tax on our agenda. It was discussed previously and fell from our agenda.”
The proposed tax package, which also extended to digital asset gains, was not well received by Turkish investors.
In June, the Finance Ministry attempted to increase capital market gains taxes in its bid to “leave no area untaxed in order to provide justice and effectiveness in taxation.”
However, it quickly led to a massive dip in trading volumes on the country’s bourses, and Finance Minister Mehmet Simsek soon reversed course. Despite the minister’s—and now the vice president’s—assurances that no new taxes will be implemented, Turkey’s stock market has yet to recover, with monthly trading volume down by nearly 50%.
For digital assets, President Recep Tayyip Erdoğan’s government sought to impose a 0.03% tax on all transactions. The finance ministry projected this would add 3.7 billion lira ($110 million) to the tax agency’s coffers.
Turkey joins South Korea in postponing digital asset taxes. The Asian nation initially intended to impose a 20% tax on annual digital asset gains in 2021. However, criticism from digital asset traders has pushed the ruling People Power Party to postpone it twice, and it’s now scheduled for January 1, 2028.
Watch: Building the future with blockchain—Insights with Ty Everett
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Source: https://coingeek.com/australia-requires-vasp-license-under-new-rules/