Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesCopyBotsEarn
Australia Aims to Regulate Crypto Start-ups with Mandatory Financial Services Licences

Australia Aims to Regulate Crypto Start-ups with Mandatory Financial Services Licences

CryptoNewsCryptoNews2024/09/23 07:27
By:Shalini Nagarajan

ASIC commissioner Alan Kirkland said that many crypto asset firms in Australia will need licensing, as several crypto assets are considered financial products under current laws.

Last updated:
September 23, 2024 01:59 EDT

Australia is set to introduce new regulations requiring the crypto industry to obtain financial services licenses under the Corporations Act.

On Monday, Australian Securities and Investments Commission commissioner Alan Kirkland said at an AFR Digital Assets Summit that many crypto-asset firms in Australia will need to be licensed. He stated that ASIC considers several crypto assets as financial products under existing laws.

ASIC’s regulatory framework focuses on “financial products,” which involve financial investments, risk management, or non-cash transactions. However, certain aspects of crypto don’t entirely align with this model. This creates uncertainty about whether specific crypto structures require licensing.

Kirkland confirmed to Cryptonews that ASIC will release new draft guidance soon, and plans to invite industry feedback on these updates.

“Millions of Australians now hold crypto-asset investments and ASIC wants to make sure they have access to important consumer protections provided by the current regulatory regime” he said.

Crypto Developers Bypass Licensing, Australia to Clarify Token Rules Amid Regulatory Concerns

Many crypto developers have not obtained Australian Financial Services Licenses (AFSLs), following legal advice. This decision is based on the belief that their investment products don’t fall under the purview of current laws, AFR reported.

To address that, ASIC plans to update guidance by November. This will clarify the classification and treatment of specific crypto tokens representing digital ownership rights and related products.

Further, Kirkland noted ASIC’s concern over potential consumer harm and market misconduct. He stated that licensing will help reduce risks, build consumer trust and protect market integrity.

ASIC Tightens Crypto Oversight

ASIC has intensified its enforcement efforts, signaling a heightened scrutiny over the crypto sector. The agency recently claimed that Kraken did not properly educate its Australian clients on the risks of margin trading, resulting in considerable financial losses for customers.

Further, in August, ASIC initiated legal action against ASX , accusing the market operator of mismanaging the blockchain-based CHESS replacement project.

0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Locked for new tokens.
APR up to 10%. Always on, always get airdrop.
Lock now!

You may also like

ChatGPT’s head of product to testify in the DOJ’s antitrust case against Google

Share link:In this post: ChatGPT’s head of product, Nick Turley, has been added as a witness for the United States Department of Justice (DOJ) in its antitrust case against Google. Nick Turley is the latest addition to the witness list that features representatives from Perplexity and Microsoft. Google ramps up preparation for Turley’s testimony by asking for documents related to the hearing from OpenAI through a subpoena.

Cryptopolitan2025/01/18 16:01

SEC charges New York blockchain engineer over GME rug pull fraud

Share link:In this post: Eric Zhu settled SEC fraud claims for orchestrating a rug pull scheme involving Game Coin. Zhu allegedly misappropriated $553K by moving unlocked liquidity provider tokens to his control. The case marks one of SEC Chair Gary Gensler’s final enforcement actions.

Cryptopolitan2025/01/18 16:01

Analyst Points to the Next Target on the Horizon After the Surge in Bitcoin: “If This Place Is Breached, The Next Stop Could Be 128 Thousand Dollars”

A crypto analyst has spoken about the next target for Bitcoin’s price after its recent rally. Here are the details.

Bitcoinsistemi2025/01/18 14:00