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Australia’s Financial Watchdog Joins Government in Eyeing Fresh Crypto Regulations

As Australian regulators take a closer look at reigning in cryptocurrencies, federal agencies continue to warn of their risks.

3 min read
Bitcoin in Australia. Image: Shutterstock

The Australian Securities and Investments Commission (ASIC) Chair Joseph Longo has made his thoughts on crypto investments clear: It’s “not my job to be a crypto cheerleader.”

During a Committee for Economic Development of Australia luncheon on Tuesday, Longo said that crypto is a “financial innovation full of promise, celebrity status, and volatility,” noting the differences between the benefits of blockchain and the volatility of crypto and how the two should not be confused with one another. 

The ASIC is Australia’s equivalent to the United States SEC, regulating the country’s financial sector and protecting consumers. And with such a fast-growing population of crypto investors down under, the regulator is bringing renewed scrutiny to the industry. 

According to an ASIC report published on August 11, 44% of the 1,053 Australians surveyed owned crypto, while 25% said that crypto was the only investment they owned. 

“With so many new investors active in financial markets, the research builds on our understanding of retail investors and helps us consider where our regulatory efforts are warranted,” Longo said in the report.

While crypto regulation has been up for an overhaul in Australia, Longo spoke of the importance of getting new rules correct to prevent scams and protect new and existing investors. 

On Monday, the Australian government also laid out its interest in regulating cryptocurrency, starting with the categorization of cryptocurrencies called a “token map.” The map would chart “the number, type and underlying code of available cryptocurrencies,” according to the Sydney Herald Times

Australian Treasurer Jim Chalmers said, “As it stands, the crypto sector is largely unregulated, and we need to do some work to get the balance right so we can embrace new and innovative technologies while safeguarding consumers.”

Australia’s approach to Crypto 

Australia’s crypto overhaul looks to improve the regulatory framework in the industry, which was once unclear and discouraged banks from working with crypto firms.

The previous government also sought changes to crypto regulations, starting with the former Treasurer Josh Frydenberg. He aimed to improve crypto business licensing and “provide greater certainty and security to those people who are transacting in that area.”

This was just the start of bringing crypto “out of the shadows,” said Frydenberg.

The recent token map categorization under Prime Minister Anthony Albanese will give crypto investors the ability to evaluate market trends and the nuances that can affect a token at any given time, too. 

“The Albanese [Prime Minister Anthony Albanese] Government is taking a more serious approach to work out what is in the ecosystem and what risks need to be looked at first,” Chalmers said.

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