- ASIC seeks to license all crypto firms under the Corporations Act.
- Regulatory updates aim to clarify crypto product classifications and protections.
Australia’s financial regulator, the Australian Securities and Investments Commission (ASIC), is pushing for tighter control over the country’s cryptocurrency sector. ASIC Commissioner Alan Kirkland has revealed that crypto firms, not just exchanges, may soon be required to obtain licenses under the Corporations Act. This move is intended to offer better consumer protections as the popularity of crypto assets grows.
Kirkland’s comments were made at the Australian Financial Review (AFR) Digital Assets Summit. Highlight ASIC’s stance that many major crypto assets should be classified as financial products.
Moreover, to this end, ASIC plans to update its “Information Paper 225” by November to clarify the regulatory treatment of specific crypto tokens and related products. The update will help resolve uncertainties regarding whether certain crypto structures require licensing.
Retaliation To Scams
This regulatory tightening follows a proposal by the Australian Treasury last year. Which called for crypto exchanges holding a significant amount of assets to acquire an Australian Financial Services Licence (AFSL). The draft of this bill was expected this year, but its introduction remains uncertain ahead of next year’s federal elections. The Treasury previously cited the failures and vulnerabilities of crypto platforms as key reasons for the need to regulate the industry to protect consumers.
ASIC’s increased focus on the crypto sector comes in response to rising concerns about scams and market misconduct. Since July 2023, the regulator has taken down over 7,300 scam websites, 615 of which were linked to cryptocurrency. Moreover, a recent ruling by the Australian Competition and Consumer Commission revealed that more than half of crypto-related ads on Facebook were scams or violated Meta’s policies.
ASIC is also ramping up enforcement, with Kraken facing scrutiny for not adequately informing clients of the risks of margin trading.
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