🪙The Australian federal government will introduce new regulations requiring crypto exchanges to obtain financial services licenses, the Australian Financial Review reported on October 15.

Assistant Treasurer Stephen Jones is scheduled to unveil these long-awaited rules during the Australian Financial Review Crypto Summit.

According to the report, the government will focus on exchanges – subject to existing financial services laws – rather than regulating individual tokens or cryptocurrencies.

Crypto exchanges that have a total of more than $5 million or exceed $1,500 for each individual user will be mandated to obtain an Australian Financial Services License (AFSL) issued by the Australian Securities and Investments Commission (ASIC).

The regulations will force exchanges to adhere to strict standards, including providing services transparently and fairly, managing conflicts of interest, disclosing information, submitting financial reports, and meeting solvency and cash reserve requirements.

In addition, asset custody rules will be implemented to increase consumer protection in this sector.

According to Treasury data, one in four Australians collectively own billions of dollars worth of cryptocurrency through exchanges operating in the country – making it critical to improve consumer protection.

The move follows a series of international hacks and cases of poor risk management, most notably the collapse of US-based crypto exchange FTX, which resulted in huge losses for around 30,000 Australians.

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