ASIC will require cryptocurrency exchanges to obtain financial services licenses under new regulations by November 2024.
The updated legislation will expand current crypto oversight, covering more assets and exchanges under Australia’s Corporations Act.
ASIC's expanded powers aim to strengthen financial market stability and regulate major market players.
The ASIC is planning to introduce new laws for cryptocurrency exchanges. These laws will require exchanges to obtain financial services licenses. Currently, only a few exchanges are licensed.
However, the new rules will expand this requirement to cover more of the sector. This move is part of a broader effort to improve regulation of the growing crypto market.
ASIC Pushes for Clearer Crypto Rules
Alan Kirkland, an ASIC commissioner, outlined the proposals at the AFR Crypto and Digital Assets Summit in Sydney. He explained that, while the Corporations Act already governs large assets such as Bitcoin, the crypto business requires more specific regulatory standards to safeguard customers and promote transparency.
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The new legislation will take effect in November 2024. It will define how cryptocurrency tokens and products are categorized. Moreover, the Corporations Act's Information Sheet 225 has been updated. This gives businesses and investors clearer guidelines.
Treasury Supports Increased Oversight
The Australian Treasury is also pushing for stricter rules on the cryptocurrency industry amid the Bitcoin ATMs growth in the country. It had earlier called for exchanges holding significant assets to obtain an Australian Financial Services License. This move aims to further tighten oversight.
This action intends to further decrease the dangers associated with cryptocurrency trading platforms, but its implementation has been postponed due to political uncertainty.
New Regulatory Powers for ASIC
ASIC's increased focus on cryptocurrency coincides with the passage of the Treasury Laws Amendment Bill 2024, which gained Royal Assent on September 17. This new law gives the Australian Securities and Investments Commission more ability to regulate Australia's financial system infrastructure.
The reforms target important financial participants such as market operators, clearing and settlement facilities, and derivative trade repositories, with the goal of improving market stability.
The proposed regulatory changes in Australia reflect growing concerns about consumer safety and market transparency. ASIC and the Treasury intend to make the crypto sector more secure and controlled by imposing stronger licensing requirements. To continue operating in Australia, cryptocurrency firms will need to comply with these restrictions.
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