Australian Government Taking Proactive Approach to Regulating Crypto Exchanges
The Australian federal government is actively working towards establishing comprehensive regulatory frameworks for the cryptocurrency sector, with a focus on cryptocurrency exchanges. The government is considering the possibility of mandating that exchanges obtain a financial services license from the local financial authority. To enhance current legislation, the Australian Treasury department has proposed measures to oversee digital-asset platforms in the country. Under this plan, platforms with a total value exceeding A$5 million or those that hold digital assets on behalf of individuals with a total value exceeding A$1,500 will need permission from the Australian Securities and Investments Commission (ASIC).
Government’s Response to the Growing Crypto Challenge
The government’s proactive move aims to address the challenges posed by the rapid growth of digital assets and improve consumer protection, market integrity, and accountability in the industry. While these regulations can increase transparency and security, they may also pose compliance challenges for smaller platforms and lead to industry consolidation. Assistant Treasurer Stephen Jones will unveil the forthcoming regulatory framework during the Australian Financial Review Crypto Summit, emphasizing its objective to safeguard customers and prevent fraudulent activities and collapses of cryptocurrency exchanges.
Cryptocurrency Exchanges Back Regulatory Measures
Large domestic cryptocurrency exchanges like BTC Markets and Independent Reserve support regulation. The government plans to engage in consultations until December 1 and publish an exposure draft of proposed legislation next year. Exchanges will have 12 months to transition and comply with the new regulatory framework. This decision aligns with previous plans proposed by the Morrison administration, prompted by recommendations from Liberal Senator Andrew Bragg. The finalization of this policy was delayed due to last year’s federal election.
Hot Take: Australia Takes Steps Towards Comprehensive Crypto Regulations
The Australian federal government is taking proactive measures to establish comprehensive regulatory frameworks for the cryptocurrency sector, particularly focusing on exchanges. This move aims to enhance consumer protection, market integrity, and accountability in the industry. By requiring exchanges to obtain a financial services license and introducing measures to oversee digital-asset platforms, the government hopes to prevent fraudulent activities and the collapse of cryptocurrency exchanges. While these regulations can improve transparency and security, they may pose challenges for smaller platforms and potentially lead to industry consolidation. Overall, this regulatory approach highlights Australia’s commitment to addressing the challenges posed by the rapid growth of digital assets.
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