Australia Proposes Regulation for Digital-Asset Service Platforms
Australia has released a proposal to regulate digital-asset service platforms in order to provide clarity and protect customers. The Australian Treasury stated in a consultation paper that the failures and vulnerabilities of these platforms have increased the need for regulation to safeguard consumers. The government plans to utilize existing financial services laws and require platforms with a certain threshold of assets to obtain an Australian Financial Services Licence. The regulators also aim to establish standards for custody software and impose additional obligations for activities such as trading, staking, tokenization, and fundraising. The consultation period for the proposal concludes on December 1, 2023.
Industry Reaction
Jonathon Miller, managing director of Kraken Australia, welcomed the consultation process but expressed concerns about fitting crypto into existing financial services regulation without accounting for technological nuances. Angela Ang, senior policy advisor at TRM Labs, commended the proposal as a thoughtful way to apply existing legal and regulatory constructs to crypto assets while considering their unique characteristics and international standards.
Banks’ Cautionary Measures
Some banks in Australia have taken precautionary measures due to potential crypto scams. National Australia Bank blocked payments to high-risk cryptocurrency exchanges, while the Commonwealth Bank of Australia limited its customers’ ability to send money to crypto exchanges because of crypto-related scams.
Hot Take: Australia Takes Steps Towards Regulating Digital-Asset Service Platforms
Australia has introduced a proposal aimed at regulating digital-asset service platforms in order to protect consumers and provide clarity in the industry. This move demonstrates the country’s commitment to keeping up with global peers in implementing a crypto framework. While industry players appreciate the need for regulation, there are concerns about potentially stifling future innovations in the crypto space by overlooking technological nuances. However, the proposal has been praised for its thoughtful approach in applying existing legal and regulatory structures to crypto assets, taking into account their unique characteristics and aligning with international standards. As the consultation period concludes, the industry awaits further developments in Australia’s crypto regulatory landscape.
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