The Australian Securities and Investments Commission (ASIC) plans to expand licensing requirements for cryptocurrency firms, including not only crypto exchanges but also other companies, to improve regulation in the rapidly evolving cryptocurrency industry.
Licensing and Regulation Update
ASIC Commissioner Alan Kirkland announced that by November, the agency would update its guidelines under Information Paper 225. This update aims to clarify the regulation of specific crypto tokens or products. Citing the lawsuit against Kraken as an example of complexities involved with unclear crypto products, Kirkland noted that many major crypto assets would likely fall under the Corporations Act, suggesting a move towards tighter industry regulation. This development follows a proposal from the Australian Treasury last year to require crypto exchanges with a specific asset threshold to obtain an Australian Financial Services Licence.
Combatting Crypto Scams
Australian authorities have raised concerns about the risks associated with cryptocurrencies, prompting the push for stronger regulatory measures. The Treasury highlighted several failures and vulnerabilities in crypto platforms, raising alarms about consumer protection. To address these issues, ASIC shut down over 7,300 fraudulent websites in 2023, 615 of which were directly linked to digital assets. In July 2024, HSBC Australia ceased payments to cryptocurrency exchanges citing concerns about fraud and dishonest behavior. The following month, ASIC reported shutting down over 600 AI-driven crypto scams within the region.
Australia as a Crypto Hub
Australia is making significant strides in the cryptocurrency sector, positioning itself as a key player in the global crypto market. Despite increased regulatory scrutiny, crypto exchanges like Binance, Kraken, and OKX are expanding their operations regionally. In June, the Australian Tax Office doubled down on crypto tax collection through a data-matching program initiative. Research conducted in 2023 revealed that 31% of youngsters in Australia hold cryptocurrencies. This growing adoption and Australia's vibrant fintech ecosystem underscore the country’s recognition as an emerging crypto hub.
The expanded licensing requirements for crypto firms and efforts to combat scams underscore Australia’s commitment to tighter regulation and consumer protection in the cryptocurrency industry. At the same time, the country continues to develop as a significant player in the global crypto market.
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