Australian Treasury proposes to regulate crypto exchanges, not tokens
The Australian treasury's newly-released consultation paper will require to crypto exchanges to apply for financial services licence from the local financial regulator.
The Australian federal government is charging forward with plans to regulate the digital asset sector at the exchange level, and may soon require cryptocurrency exchanges to hold a financial services license issued by the local financial regulator.
The core theme of the new regulatory framework is that it aims to regulate cryptocurrency exchanges and service providers instead of individual cryptocurrencies or tokens themselves.
The proposed new rules will see any crypto exchange holding more than $3.2 million, or more than $946 per individual, required to obtain a licence from the Australian Securities and Investment Commission (ASIC).
The proposal has seen a mixed reaction from crypto exchanges operating in Australia.
Australian crypto exchange Swyftx's general counsel Adam Percy called the proposal "thoughtful" and agreed that "the primary focus should be to make sure cryptocurrency users can access blockchain technology with appropriate protections and that there’s room for innovation."
Liam Hennessy, partner at international law firm Clyde & Co said that while its clear that the Treasury is still "grappling" with all of the different types of tokens and services providers, it's crucial to remember that all new proposals set out in the consultation paper are still only suggestions, and are not legally binding recommendations.
Hennessy said that the consultation paper arguably doesn't address the more pressing issues facing the crypto industry in Australia, like issues such as the recent slew of de-banking.
"Many licensed digital assets exchanges, both domestic and international, are struggling to find adequate banking arrangements," said Hennessy.
