Search
Search
Australia Mandates Cryptocurrency Exchange Licenses

Australia Plans to Require Crypto Exchanges to Obtain Licenses to Curb Risks

0
0

289 Listen to this article Australia is moving forward with plans to regulate cryptocurrency exchanges by requiring them to hold […]

Latest News

Listen to this article

Australia is moving forward with plans to regulate cryptocurrency exchanges by requiring them to hold a financial services license issued by the Australian Securities and Investments Commission (ASIC). This move aims to support the growth of the digital asset sector while ensuring consumer protection. The government’s proposal builds on existing laws and will apply to digital asset platforms that hold more than A$5 million (approximately $3.2 million) or A$1,500 for individual investors.

The proposed regulations will also encompass custody and transaction standards, drawing inspiration from regulatory frameworks used in the United Kingdom, Canada, and Singapore. Several jurisdictions worldwide have been ramping up efforts to regulate digital assets in response to the challenges and risks associated with the cryptocurrency market, including a significant crypto market downturn with a loss of $1.5 trillion in value and the subsequent collapse of high-profile trading platforms. One notable example is the bankruptcy of Sam Bankman-Fried’s FTX exchange, with Bankman-Fried facing allegations of overseeing a multibillion-dollar fraud, currently on trial in the United States.

The United Kingdom, for instance, is working on regulations that will treat cryptoasset activities, including trading, lending, and custody, under the same regulatory regime as traditional financial services. In Canada, firms are subject to stricter regulations regarding the segregation of customer assets and are prohibited from offering margin or leverage. Singapore, on the other hand, is restricting retail investor participation in crypto-related trading and investments while simultaneously striving to establish itself as a hub for innovative blockchain applications, such as the tokenization of real-world assets.

Read Also:  Cardano (ADA) Touches to Yearly Low: Entering Depression Phase?

The Australian government has initiated a consultation process to gather feedback on its proposed regulations, with the consultation period ending on December 1. Draft legislation is expected to be introduced next year, followed by a 12-month period for crypto exchanges to ensure they comply with the new rules.

The proposed regulatory obligations for cryptocurrency firms are rooted in existing financial services law. These obligations include submitting financial records, monitoring market misconduct, and meeting solvency and cash reserve requirements. The goal is to hold cryptocurrency businesses accountable to the same high standards expected of traditional financial services providers.

Caroline Bowler, CEO of the crypto platform BTC Markets Pty, expressed support for the proposed regulations, describing them as “a positive progression for the crypto industry.” She emphasized the importance of Australia aligning itself with international peers in establishing a robust regulatory framework for the cryptocurrency sector.

The proposed regulations extend beyond licensing requirements and financial standards. They also encompass other aspects of the cryptocurrency industry, such as trading, staking, and the creation of tokens. Staking involves individuals or entities pledging their coins to support blockchain operations and, in return, earning rewards.

In recent times, Australian banks have become increasingly cautious about providing access to digital asset platforms due to concerns about risks associated with scams and regulatory uncertainties. ASIC has also been investigating the now-defunct local derivatives business of Binance Australia, further highlighting the need for regulatory oversight and accountability in the cryptocurrency space.

Joseph Longo, the Chairman of ASIC, emphasized the importance of holding the cryptocurrency industry to the same high standards as other sectors during a digital asset conference in Sydney. He stressed the need for accountability and consumer protection.

Read Also:  VeChain and UFC Unveil Tokenized Gloves Collaboration

At the same event, Brad Jones, an assistant governor at the Reserve Bank of Australia, announced that the central bank is in the early stages of planning a project to assess how different forms of digital money and infrastructure could support the development of tokenized asset markets. Tokenization has the potential to offer significant cost savings for local financial markets, including billions annually for transactions and capital market issuers.

You Might Also Like

0 0 votes
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments

Get Latest Updates

Latest News

Web Stories

Latest News

0
Would love your thoughts, please comment.x
()
x
Scroll to Top
Bitcoin ETFs Surge as Investors Seek Exposure Coinbase, Andreessen Horowitz, and Ripple have joined forces to fund a new crypto DMM Bitcoin Hit by $305M Hack Ripple Releases 1 Billion XRP Tokens What to Expect from Bitcoin’s Price Rally in H2 2024 Trump’s MAGA Coin Soars 7% While Biden Parody Sinks Amid Ex-President’s Trial — NFTs Hold Steady Analyst Warns About Dogecoin Decline CME Denies Solana Futures Plans Amid Growing Rumors Can PEPE flip Polygon? Market cap race heats up! Why Bitcoin Price Is Down Today? Cristiano Ronaldo Launches 4th NFT Collection on Binance Amid $1B Lawsuit Coinbase Alleges SEC Dodging Howey Test in New Appeal Ethereum ETFs Granted Official Approval by SEC Crypto Whale Splurges $10.4 Million on Meme Coin PEPE SOL Price Nearing Support as On-Chain Activity Dips for Solana Penguiana Meme Coin’s Presale Achieves Success, Raising 290 SOL Solana to Bitcoin Bridge, Zeus Network, Set for Debut in Q3 2024 DeFi Lending Leader Aave Unveils V4 Protocol Overhaul MicroStrategy (MSTR) Incurs Losses in Q1 After Digital Asset Impairment Takes Toll Upbit Emerges as Top Five Crypto Exchange, Posing Challenge to Binance, Coinbase