Concerns Over Cryptocurrency Regulation
In a recent publication, the Australian Securities and Investments Commission (ASIC) has flagged gaps in the regulation of cryptocurrency firms as a significant concern for the upcoming year. The Key Issues Outlook released on Monday highlights that rapidly evolving sectors such as cryptocurrency, payment systems, and artificial intelligence are producing risks such as unlicensed advice and misleading actions that can harm consumers.
Call for Vigilance
ASIC Chair Joe Longo emphasized the need for vigilance, stating that the agency is observing critical transformations within the financial landscape of Australia, exacerbated by increasing pressures on markets, consumers, and businesses. He noted that differing global regulatory frameworks are leading to fragmentation, complicating compliance procedures, and potentially resulting in inconsistent consumer protections.
Proposed Legislative Changes
This cautionary message comes at a pivotal time as the Australian government seeks to close these regulatory loopholes through the proposed Corporations Amendment (Digital Assets Framework) Bill 2025. Introduced in November, this legislation aims to create the nation’s first legal framework governing businesses that manage digital assets for clients. It is projected to foster productivity, with potential annual benefits estimated at $24 billion, while requiring platforms to secure an Australian Financial Services Licence to operate legally.
Regulatory Clarity Needed
ASIC has identified that, while some operators may function legitimately outside of existing regulations, there are also entities that deliberately avoid regulation, contributing to confusion in this area. Continuous improvement in clarity regarding licensing and regulatory oversight is seen as a high priority for the near future.
