The Australian government is taking a proactive approach to regulating cryptocurrency and ensuring the protection of consumers with a “multi-stage approach”. Treasurers Jim Chalmers and Stephen Jones recently announced the plans in a joint statement, outlining three main elements to th
The Australian government is taking a proactive approach to regulating cryptocurrency and ensuring the protection of consumers with a “multi-stage approach”. Treasurers Jim Chalmers and Stephen Jones recently announced the plans in a joint statement, outlining three main elements to this approach: strengthening enforcement, bolstering consumer protection, and establishing a framework for its token mapping reform.
One of the key changes in this approach will be the expansion of the Australian Securities & Investments Commission (ASIC)’s digital assets team, with a focus on upping enforcement measures. ASIC will be tasked with ensuring that the risks associated with crypto products and service providers are appropriately disclosed to consumers. The government has not yet disclosed the exact number of additional positions that will be filled, but it is clear that the ASIC’s role in crypto regulation will be significantly strengthened.
In addition to the ASIC, the government will also be providing the Australian Competition and Consumer Commission (ACCC) with new tools to protect consumers from crypto scams. In 2022, scam losses through crypto payments reached a staggering $221 million, and the ACCC will now have access to a real-time data-sharing tool to identify and prevent these scams.
Consumer protection is a top priority for the Australian government, and the third element of their multi-stage approach will see the establishment of a framework to regulate the licensing and custody of digital assets. This framework aims to ensure that consumers are protected from avoidable business failures or the misuse of their assets by service providers. The framework is still in the works and is expected to take considerable time before it can be implemented into legislation, but it is expected to be finalized by mid-2023.
The government’s proactive approach to crypto regulation was fast-tracked by the catastrophic collapse of FTX in November of 2022, which impacted over 30,000 Aussies and 132 Australian-based companies. The Treasurers acknowledge the previous government’s lack of action in crypto space.
The previous government dabbled in crypto policy but never took the time to future-proof our regulatory frameworks to protect consumers and guide this new and emerging class of assets. We are acting swiftly and methodically to ensure that consumers are adequately protected and true innovation can flourish.
The Treasury released its token mapping consultation paper on February 2, which outlines the government’s plan to determine which elements of the cryptocurrency ecosystem will be regulated and to what extent. This multi-stage approach to crypto regulation is a significant step towards a safer and more secure crypto environment for both consumers and businesses alike.
The Australian government is taking a strong stance on cryptocurrency regulation, with consumer protection at the forefront of their efforts. The expansion of ASIC’s digital assets team, the provision of new tools to the ACCC, and the establishment of a framework to regulate the licensing and custody of digital assets are all key steps towards a regulated and safe crypto environment.