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Australian regulators are preparing to come up with new regulations for crypto exchanges in the region. Under the new rule, all such firms will be required to hold financial services licenses so that a close eye can be kept on the fast-growing digital asset market.

ASIC Concerned Over Current Regulatory Framework

The Australian Securities and Investments Commission (ASIC) stated that it is worried about the effectiveness of the current regulatory framework in dealing with the complexities of popular cryptocurrencies like Bitcoin and Ether. Commissioner Alan Kirkland revealed this during the AFR Crypto and Digital Assets Summit in Sydney on September 23, 2024.

The commissioner claims many widely traded crypto assets already qualify as financial products. So, this makes them subject to the existing Corporations Act. Therefore, it has now become necessary that clear guidance and enforcement be set up. 

Crypto Exchanges Required To Obtain Financial Services Licenses

Therefore, the crypto exchanges in Australia would now be required to obtain the financial services licenses. That is if they intend to continue their operations, as per a report by The Australian Financial Review (AFR).

Kirkland remarked that the new regulations are only a means to bring crypto exchanges in line with the financial sector. Besides, since many of these crypto assets are, in fact, financial products, then the crypto exchanges must obtain the same type of licenses that traditional financial institutions do.

For ASIC, this move is a way to ensure that the firms stay in line and comply with the established standards for transparency, consumer protection, and anti-money laundering.

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ASIC To Release Updated Guidelines By November

ASIC will release updated guidelines under the Corporations Act by November 2024. This new legislation is expected to outline how specific crypto tokens and products will be treated from a regulatory perspective. These changes are anticipated to provide more regulatory clarity for industry participants.

Senator Slams Australian Regulators

Senator Andrew Bragg shared his Address at the AFR Cryptocurrency Summit and slammed the Australian regulators for not taking a proactive approach to regulating the crypto market in his latest X post. He argued that Australia “has gone from crypto leader to crypto laggard” in the past two and half years.

He also predicted that Australia is unlikely to get any crypto regulation forward in the current Parliament term, and stated “Labor has wasted three years by solely focusing on the needs of their close vested interests…By locking Australia in the crypto slow lane, Labor has stifled innovation and denied Australians the opportunities to reap the benefits that blockchain provides.”