Regulators to ramp up crypto crackdown
The Albanese Government has announced plans to heighten oversight of the crypto trading industry amid concern over the impact of “unsustainable business models” on consumers.
The Government’s new “multi-stage approach” aimed to:
- Strengthen enforcement;
- Bolster consumer protection; and
- Establish a framework for reform.
As part of the first stage, the Australian Securities and Investments Commission (ASIC) would be tasked with expanding the size of its crypto team to build enforcement capacity.
This was tipped to involve launching legal action against crypto dealers suspected of marketing their products or services without appropriate credit or financial services licences.
ASIC’s primary remit would be to ensure risks of crypto were properly disclosed to consumers.
Meanwhile, the Australian Competition and Consumer Commission (ACCC) would be responsible for “stepping up efforts” to prevent crypto scams.
Specifically, the Federal Government’s National Anti‑Scams Centre, managed by the ACCC, would facilitate “real‑time data sharing” and the “coordinated prevention and disruption of scams”.
This comes after the ACCC’s Scamwatch report found more scammers were seeking payment via crypto, with losses reported via cryptocurrency exchange totalling $221 million in 2022 — a 162% increase year-on-year.
AUSTRAC, which monitored crypto exchanges under the Anti-Money Laundering and Counter Terrorism Financing Act, was also expected to support efforts to strengthen oversight.
Enhanced enforcement and oversight would pave the way for a new legislative framework, with the Government unveiling plans to reform the licensing and custody of crypto assets.
Prospective reforms would particularly target the subset of crypto assts, which were currently not subject to the financial services regulatory framework.
The future framework was expected to include new obligations and operational standards for crypto asset service providers, aimed at ensuring they “adequately safe‑keep assets for customers”, particularly in the event of business failures.
The government is slated to commence consultation on the design of a custody and licensing framework in mid‑2023.
Treasury’s token mapping exercise, announced in August 2022, is expected to provide guidance ahead of the formalisation of future reforms.
A consultation paper was published on Friday (3 February) with an overview of the crypto ecosystem — noting elements of the sector which require additional regulatory attention.
These include:
- ‘Intermediated token systems’ — involving intermediaries issuing crypto assets and providing crypto asset services; and
- Anonymous crypto transactions between users, which may involve the creation of financial or non-financial crypto assets that are “fundamentally different” to intermediated counterparts.
“The Albanese Government is committed to working methodically with regulators, industry, and consumer and business advocacy groups to get the policy settings right to protect consumers and support innovation in this emerging sector,” Treasurer Jim Chalmers noted in a statement.
AUTHOR
Charbel Kadib
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So after the vast amount of damage is already done and many Australian's have lost significant amounts of money, finally the government and ASIC acts. Imagine the money saved if they acted when the risks of crypto were raised by so many advisers years ago.
No doubt All funded by Real Advisers and more ASIC Adviser levies :-/